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WEBSTER FINANCIAL CORP

WEBSTER FINANCIAL CORPWBSEarnings & Financial Report

NYSE · Financials · National Commercial Banks

Webster Bank is an American commercial bank based in Stamford, Connecticut. It has 177 branches and 316 ATMs located in Connecticut; Massachusetts; Rhode Island; New Jersey; Westchester, Orange, Ulster, and Rockland counties in New York as well as New York City.

What changed in WEBSTER FINANCIAL CORP's 10-K — 2024 vs 2025

Top changes in WEBSTER FINANCIAL CORP's 2025 10-K

621 paragraphs added · 558 removed · 433 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

119 edited+59 added−41 removed56 unchanged
Generally, sections 23A and 23B of the FRA are intended to protect insured depository institutions from losses arising from transactions with non-insured affiliates by (i) limiting the extent to which an institution or its subsidiaries may engage in covered transactions with any one affiliate and with all affiliates in the aggregate, and (ii) requiring that all such transactions be on terms substantially the same, or at least favorable, to the institution or subsidiary as those provided to a non-affiliate.
Generally, sections 23A and 23B of the FRA are intended to protect insured depository institutions from losses arising from transactions with non-insured affiliates by (i) limiting the extent to which an institution or its subsidiaries may engage in covered transactions with any one affiliate and with all affiliates in the aggregate, and (ii) requiring that all such transactions be on terms substantially the same, or at least favorable, to the institution or subsidiary as those provided to a non-affiliate on market terms.
Although the Holding Company’s total consolidated assets are beneath the $250 billion threshold, the Company performs certain stress tests internally and incorporates the economic models and information developed through its stress testing program into its risk management and capital planning activities, which continue to be subject to the regular supervisory processes of the Federal Reserve System and the OCC.
Although the Company’s total consolidated assets are beneath the $250 billion threshold, the Company performs certain stress tests internally and incorporates the economic models and information developed through its stress testing program into its risk management and capital planning activities, which continue to be subject to the regular supervisory processes of the Federal Reserve System and the OCC.
Webster Bank is a commercial bank with a national bank charter focused on providing financial products and services to businesses, individuals, and families. While its core footprint spans the Northeast from the New York metropolitan area to Rhode Island and Massachusetts, certain businesses operate in extended geographies.
The Bank is a commercial bank with a national bank charter focused on providing financial products and services to businesses, individuals, and families. While its core footprint spans the Northeast from the New York metropolitan area to Rhode Island and Massachusetts, certain businesses operate in extended geographies.
If an insured depository institution fails, claims of insured and uninsured depositors, along with claims of the FDIC, would have priority in payment ahead of unsecured, non-deposit creditors, including the Holding Company, with respect to any extensions of credit they have made to such insured depository institution.
If an insured depository institution fails, claims of insured and uninsured depositors, along with claims of the FDIC, would have priority in payment ahead of unsecured, non-deposit creditors, including the Company, with respect to any extensions of credit they have made to such insured depository institution.
As a publicly-traded company, the Holding Company is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, which are administered by the SEC. As a publicly-traded company with securities listed on the NYSE, the Holding Company is subject to the rules of the NYSE.
As a publicly-traded company, the Company is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, which are administered by the SEC. As a publicly-traded company with securities listed on the NYSE, the Company is subject to the rules of the NYSE.
This support may be required at times when the Holding Company is not in a financial position to provide such resources without adversely affecting its ability to meet other obligations.
This support may be required at times when the Company is not in a financial position to provide such resources without adversely affecting its ability to meet other obligations.
In addition, under the National Bank Act, if the Bank’s capital stock is impaired by losses or otherwise, the OCC is authorized to require payment of the deficiency by assessment upon the Holding Company.
In addition, under the National Bank Act, if the Bank’s capital stock is impaired by losses or otherwise, the OCC is authorized to require payment of the deficiency by assessment upon the Company.
Bank holding companies that qualify and elect to become financial holding companies, such as the Holding Company, may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either financial in nature or incidental to such financial activity (as determined by the Board of Governors of the Federal Reserve System in consultation with the Secretary of the Treasury), or complementary to a financial activity, and that does not pose a substantial risk to the safety and soundness of depository institutions or the financial system (as solely determined by the Board of Governors of the Federal Reserve System).
Bank holding companies that qualify and elect to become financial holding companies, such as the Company, may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either financial in nature or incidental to such financial activity (as determined by the Federal Reserve in consultation with the Secretary of the Treasury), or complementary to a financial activity, and that does not pose a substantial risk to the safety and soundness of depository institutions or the financial system (as solely determined by the Federal Reserve).
Federal Reserve System Federal Reserve System regulations require depository institutions to maintain reserves against its transaction accounts and non-personal time deposits for the purposes of implementing monetary policy. The reserve requirement must be satisfied in the form of vault cash and, if vault cash is insufficient, by maintaining a balance in an account at a FRB.
Federal Reserve System Regulations of the Federal Reserve require a depository institution to maintain reserves against its transaction accounts and non-personal time deposits for the purposes of implementing monetary policy. The reserve requirement must be satisfied in the form of vault cash and, if vault cash is insufficient, by maintaining a balance in an account at a FRB.
The FDIF is funded mainly through quarterly assessments on insured depository institutions, such as the Bank, and provides insurance coverage for certain deposits up to this maximum amount. The Bank’s assessment is determined each quarter in accordance with the FDIC’s standardized risk-based methodology by multiplying its assessment rate by its assessment base.
The DIF is funded mainly through quarterly assessments on insured depository institutions, such as the Bank, and provides insurance coverage for certain deposits up to this maximum amount. The Bank’s assessment is determined each quarter in accordance with the FDIC’s standardized risk-based methodology by multiplying its assessment rate by its assessment base.
The Company’s operations are organized into three reportable segments that represent its differentiated lines of business: Commercial Banking, Healthcare Financial Services, and Consumer Banking. Commercial Banking delivers financial solutions both nationally and regionally to a wide range of companies, investors, government entities, and other public and private institutions.
The Company’s operations are organized into three reportable segments that represent its differentiated lines of business: Commercial Banking, Healthcare Financial Services, and Consumer Banking. Commercial Banking delivers financial solutions nationally to a wide range of companies, investors, government entities, and other public and private institutions.
As of December 31, 2024, the Bank was categorized as “well-capitalized” under each of its capital ratio categories. An insured depository institution with a ratio of tangible equity less than or equal to 2% is considered to be critically under capitalized.
As of December 31, 2025, the Bank was categorized as “well-capitalized” under each of its capital ratio categories. An insured depository institution with a ratio of tangible equity less than or equal to 2% is considered to be critically under capitalized.
On November 29, 2023, the FDIC published a final rule implementing a special assessment for certain banks to recover losses incurred by protecting uninsured depositors of Silicon Valley Bank and Signature Bank upon their failure in March 2023.
In November 2023, the FDIC published a final rule implementing a special assessment for certain banks to recover losses incurred by protecting uninsured depositors of Silicon Valley Bank and Signature Bank upon their failure in March 2023.
Accordingly, management aims to actively measure and manage concentrations by portfolio, industry sector and specific sub-sectors, geography, affiliated obligors, and other guidelines. Webster is primarily a relationship lender. In addition, Webster will only assume credit risk when it can be effectively managed from an infrastructure or operational perspective, and it has industry, product, and market expertise.
Accordingly, management aims to actively measure and manage concentrations by portfolio, industry sector, and specific sub-sectors, geography, affiliated obligors, and other common characteristics. Webster is primarily a relationship lender. In addition, Webster will only assume credit risk when it can be effectively managed from an infrastructure or operational perspective, and it has industry, product, and market expertise.
The federal banking regulatory agencies have adopted guidelines for establishing information security standards and programs to protect such information, with an increased focus on risk management and processes related to information technology, and the use of third parties.
The federal bank regulatory agencies have adopted guidelines for establishing information security standards and programs to protect such information, with an increased focus on risk management and processes related to information technology, and the use of third parties.
Additionally, the Board of Governors of the Federal Reserve System could impose corrective capital and managerial requirements and activity restrictions on us if we cease to be “well-capitalized” or “well managed.” Acquisitions of Ownership Acquisitions of Webster voting stock above certain thresholds may be subject to prior regulatory notice or approval under applicable federal banking laws.
Additionally, the Federal Reserve could impose corrective capital and managerial requirements and activity restrictions on us if we cease to be “well-capitalized” or “well managed.” Acquisitions of Ownership Acquisitions of Webster voting stock above certain thresholds may be subject to prior regulatory notice or approval under applicable federal banking laws.
Debit Card Interchange Fees The Board of Governors of the Federal Reserve System requires that the amount of any interchange transaction fee that a debit card issuer may receive or charge with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the debit card issuer with respect to the transaction, and imposes requirements regarding routing and exclusivity of electronic debit transactions and the usability of debit cards across networks.
Debit Card Interchange Fees The Federal Reserve requires that the amount of any interchange transaction fee that a debit card issuer may receive or charge with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the debit card issuer with respect to the transaction, and imposes requirements regarding routing and exclusivity of electronic debit transactions and the usability of debit cards across networks.
Mergers and Acquisitions Under the BHC Act, prior approval from the Board of Governors of the Federal Reserve System is required in order for any bank holding company to acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank, acquire all or substantially all of the assets of a bank, or merge or consolidate with any other bank holding company.
Mergers and Acquisitions Under the BHC Act, prior approval from the Federal Reserve is required in order for any bank holding company to acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank, acquire all or substantially all of the assets of a bank, or merge or consolidate with any other bank holding company.
The Federal Reserve System may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices if it fails to commit resources to such a subsidiary bank, or if it undertakes actions that the Federal Reserve System believes might jeopardize the bank holding company’s ability to commit resources to such subsidiary bank.
The Federal Reserve may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices if it fails to commit resources to such a subsidiary bank when necessary, or if it undertakes actions that the Federal Reserve believes might jeopardize the bank holding company’s ability to commit resources to such subsidiary bank when necessary.
In the event of bankruptcy, any commitment by a bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank would be assumed by the bankruptcy trustee and entitled to a priority of payment.
In the event of bankruptcy, a formal commitment by a bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank would be assumed by the bankruptcy trustee and entitled to a priority of payment.
Webster’s enterprise risk management framework, which is aligned with the OCC’s Heightened Standards and the Handbook on Large Bank Supervision, reflects a structured and systematic approach to managing risks and controlling risk-taking activities across the organization. Risk identification is a continuous process and occurs at various levels throughout the organization.
Webster’s risk governance framework, which is aligned with the OCC’s Heightened Standards and the Handbook on Large Bank Supervision, reflects a structured and systematic approach to managing risks and controlling risk-taking activities across the organization. Risk identification is a continuous process and occurs at various levels throughout the organization.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 14: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 13: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.
The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the FDIF reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028.
The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028.
Financial institutions are required to take certain measures to identify their customers, prevent money laundering, monitor customer transactions, and report suspicious activity to U.S. law enforcement agencies. Financial institutions also are required to respond to requests for information from federal banking agencies and law enforcement agencies.
Financial institutions are required to take certain measures to identify their customers, prevent money laundering, monitor customer transactions, and report suspicious activity to U.S. law enforcement agencies. Financial institutions also are required to respond to requests for information from federal bank regulatory agencies and law enforcement agencies.
In addition, federal banking regulators have the authority to prohibit the Company from engaging in unsafe or unsound practices in conducting its business. The declaration and payment of dividends, depending on the financial condition of the Bank, could be deemed an unsafe or unsound practice, especially if its capital base is depleted to an inadequate level.
In addition, federal bank regulatory agencies have the authority to prohibit the Company from engaging in unsafe or unsound practices in conducting its business. The declaration and payment of dividends, depending on the financial condition of the Bank, could be deemed an unsafe or unsound practice, especially if its capital base is depleted to an inadequate level.
On October 18, 2022, the FDIC increased the initial deposit base deposit insurance assessment rate schedules uniformly by 2 basis points for all insured depository institutions, beginning in the first quarterly assessment period of 2023.
In 2022, the FDIC increased the initial deposit base deposit insurance assessment rate schedules uniformly by 2 basis points for all insured depository institutions, beginning in the first quarterly assessment period of 2023.
Detailed roles and responsibilities for each line are as follows: Front Line Units, also referred to as First Line Functions, represent process owners that engage in activities designed to generate revenue and reduce expenses, provide operational and technology services, and provide operational support and servicing in the delivery of products or services.
Detailed roles and responsibilities for each line are as follows: * First Line of Defense: Front-Line Units represent process owners that engage in activities designed to generate revenue and reduce expenses, provide operational and technology services, and provide operational support and servicing in the delivery of products or services.
On October 10, 2019, the Federal Reserve Board, along with other federal bank regulatory agencies, tailored these prudential standards allowing bank holding companies with total consolidated assets of $250 billion or less to be exempt from certain enhanced capital and liquidity prudential standards, including company-run stress testing, capital planning, liquidity coverage ratio, and resolution planning requirements, among others.
In 2019, the Federal Reserve, along with other federal bank regulatory agencies, tailored these prudential standards allowing bank holding companies with total consolidated assets of $250 billion or less to be exempt from certain enhanced capital and liquidity prudential standards, including company-run stress testing, capital planning, liquidity coverage ratio, and resolution planning requirements, among others.
Pursuant to Section 22(h), loans to directors, executive officers, and principal stockholders must be made on terms substantially the same as offered in comparable transactions to other persons, except that such insiders may receive preferential loans made under a benefit or compensation program that is widely available to the institution’s employees and does not give preference to the insider over the employees.
Pursuant to Section 22(h), extensions of credit to directors, executive officers, and principal stockholders of the Bank or its affiliates must be made on terms substantially the same as offered in comparable transactions to other persons, except that such insiders may receive preferential extensions of credit made under a benefit or compensation program that is widely available to the institution’s employees and does not give preference to the insider over the employees.
We continually review and evolve our benefit plans as necessary to remain competitive and meet the needs of our workforce. Learning and Talent Management. We are focused on investing in our current and future talent by actively supporting the success, growth, and career progression of our employees.
We continually review and evolve our benefit plans as necessary to remain competitive and meet the needs of our workforce. 2 Table of Contents Learning and Talent Management. We are focused on investing in our current and future talent by actively supporting the success, growth, and career progression of our colleagues.
The Company maintains a standing Risk Committee of the Board of Directors that meets the OCC’s regulatory requirements to oversee its enterprise risk management framework.
The Bank maintains a standing Risk Committee of the Board that meets the OCC’s regulatory requirements to oversee its enterprise risk management framework.
Our Internship Program and our Rotational Program for early-career college graduates provide rotating assignments throughout the bank. Further, we offer our RISE Emerging Talent Program for high-potential individuals, and our flagship management development program, Lead with Impact.
Our Internship Program and our Rotational Program for early-career college graduates provide rotating assignments throughout the bank. Further, we offer our RISE Emerging Talent Program for high-potential individuals, our flagship management development program, Lead with Impact, and our Advanced Leadership Program targeted to our top leadership talent.
The Third Line provides an independent and objective assurance to management and the Board and assesses whether the First and Second Line functions are operating effectively.
The Third Line provides independent and objective assurance to management and the Board, assessing whether the First and Second Line functions are operating effectively.
Financial Statements and Supplementary Data. 1 Table of Contents Available Information The Company files reports with the SEC, and makes available, free of charge, within the investor relations section of its internet website (http://investors.websterbank.com), its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the SEC.
Available Information The Company files reports with the SEC, and makes available, free of charge, within the investor relations section of its website (http://investors.websterbank.com), its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the SEC.
The Bank, as a member of the FHLB of Boston, is required to purchase and hold shares of FHLB capital stock for its membership and other activities in an amount equal to 0.05% of total assets as of December 31, 2023, up to a maximum of $5 million, plus an amount that varies from 3.0% to 4.0% depending on the maturities of its FHLB advances, of which there were $2.1 billion outstanding at December 31, 2024.
The Bank, as a member of the FHLB of Boston, is required to purchase and hold shares of FHLB capital stock for its membership and other activities in an amount equal to 0.05% of total assets as of the end of the prior calendar year, up to a maximum of $5 million, plus an amount that varies from 3.0% to 4.0% depending on the maturities of its FHLB advances, of which there were $3.0 billion outstanding for the Bank at December 31, 2025.
Our employees have access to our internal learning resource that offers virtual instructor-led training and on-demand programs. We also provide unlimited access to self-directed e-learning courses taught by industry experts with curated learning paths designed for specific professional interests. Significant investments in formal development programs are made to build our talent pipeline.
Our colleagues have access to our internal learning resources that offer in-person facilitated learning programs, virtual instructor-led training and on-demand programs. We also provide unlimited access to self-directed e-learning courses taught by industry experts with curated learning paths designed for specific professional interests. Significant investments in formal development programs are made to build our talent pipeline.
Bank Holding Company Activities In general, the BHC Act limits the business of bank holding companies to banking, managing, or controlling banks and other activities that the Board of Governors of the Federal Reserve System has determined to be closely related to banking.
Permissible Activities In general, the BHC Act limits the business of bank holding companies to banking, managing, or controlling banks and other activities that the Federal Reserve has determined to be closely related to banking.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 21: Segment Reporting in the Notes to Consolidated Financial Statements contained in Item 8.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 20: Segment Reporting in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.
Since Front Line Unit activities inherently create risk, the Front Line Units are responsible for assessing and managing that risk. Independent Risk Management, also referred to as the Second Line Function, is responsible for identifying, measuring, monitoring, or controlling risks independently from the Front Line Units and providing effective challenge to the Front Line Units.
Since Front-Line Unit activities inherently create risk, the Front-Line Units are responsible for assessing and managing that risk. * Second Line of Defense: Independent Risk Management is responsible for identifying, measuring, monitoring, or controlling risks independently from the Front-Line Units and providing effective challenge to the Front-Line Units.
As a national banking association, the Bank derives its lending, investment, and other bank activity powers from the National Bank Act, as amended, and the regulations of the OCC promulgated thereunder. The Holding Company’s non-bank subsidiaries are also subject to regulation by the Board of Governors of the Federal Reserve System and other applicable federal and state agencies.
As a national banking association, the Bank derives its lending, investment, and other bank activity powers from the National Bank Act, as amended, and the regulations of the OCC promulgated thereunder. 3 Table of Contents The Company’s non-bank subsidiaries are also subject to regulation by the Federal Reserve and other applicable federal and state agencies.
However, the Holding Company is required to receive prior approval from the Board of Governors of the Federal Reserve System for an acquisition in which the total consolidated assets to be acquired exceeds $10 billion.
However, the Company is required to receive prior approval from the Federal Reserve for an acquisition in which the total consolidated assets to be acquired exceeds $10 billion.
Webster’s loan portfolio is balanced to include both commercial and consumer lending activity, while closely managing concentrations in borrowers, counterparties, industries, and solutions to avoid excessive correlated risk. Diversification of the loan portfolio across commercial and industrial, specialty finance, commercial real estate, and residential lending is important in managing credit risk.
Webster’s loan portfolio is balanced to include both commercial and consumer lending activity while closely managing concentrations in borrowers, counterparties, industries, geographies, and collateral asset classes to avoid excessive correlated risk. Diversification of the loan portfolio across commercial and industrial, commercial real estate, and consumer is important in managing credit risk.
Capital loans by banking holding companies to its subsidiary banks would be subordinate in right of payment to deposits and certain other debts of the subsidiary bank.
Capital loans by a bank holding company to its subsidiary bank would be subordinate in right of payment to deposits and certain other debts of the subsidiary bank.
As of December 31, 2024, the Bank’s active consolidated subsidiaries included: Webster Licensing, LLC, Webster Wealth Advisors, Inc., Bend Financial, Inc., InterLINK Insured Sweep LLC, Ametros Financial Corporation, Webster Servicing LLC, Webster Public Finance Corporation, Webster Mortgage Investment Corporation, Sterling National Funding Corp., Sterling REIT, Inc., Sterling Business Credit LLC, Webster Preferred Capital Corporation, and Webster Investment Services, Inc.
The Bank’s active consolidated subsidiaries included Webster Licensing, LLC, Webster Wealth Advisors, Inc., Bend Financial, Inc., InterLINK Insured Sweep LLC, Ametros Financial Corporation, Webster Servicing LLC, Webster Public Finance Corporation, Webster Mortgage Investment Corporation, Sterling National Funding Corp., Sterling REIT, Inc., Webster Preferred Capital Corporation, Webster Investment Services, Inc., and Secure Inc.
The Bank was in compliance with these requirements at December 31, 2024, and held a FHLB stock investment of $91.7 million. Source of Strength Doctrine Bank holding companies are required to serve as a source of financial strength to their subsidiary banks and commit resources to support each of their subsidiary banks.
The Bank was in compliance with these requirements at December 31, 2025, and held a FHLB stock investment of $125.2 million. Source of Strength Doctrine Bank holding companies are required to serve as a source of financial and managerial strength to their subsidiary banks and could be required to commit resources to support each of their subsidiary banks.
On July 19, 2024, the Company, through its subsidiary MW Advisor Holding, LLC, entered into an agreement with Marathon Asset Management and formed MW Advisors, LLC, a private credit joint venture, which will deliver direct lending solutions for sponsor-backed middle market companies across the country. The Company and Marathon Asset Management each own 50 percent of MW Advisors, LLC.
Joint Venture with Marathon Asset Management On July 19, 2024, the Company, through its subsidiary, MW Advisor Holding, LLC, entered into an agreement with Marathon Asset Management and formed a private credit joint venture, which is designed to deliver direct lending solutions for sponsor-backed middle market companies across the country.
Generally, the Holding Company is not required to obtain prior approval from the Board of Governors of the Federal Reserve System to acquire a non-bank that engages in activities that are financial in nature or incidental to activities that are financial in nature, as long as the Holding Company meets the capital, managerial, and CRA requirements to qualify as a financial holding company.
Generally, the Company is not required to obtain prior approval from the Federal Reserve to acquire a non-bank that engages in activities that are financial in nature or incidental to activities that are financial in nature, as long as the Company continues to meet the capital, managerial, and CRA requirements that enable it to qualify as a financial holding company.
The Bank is organized as a national banking association under the National Bank Act, as amended, and is subject to the supervision of and regular examination by the OCC, its primary federal regulator, as well as by the FDIC, its deposit insurer.
The Bank is organized as a national banking association under the National Bank Act, as amended, and is subject to the supervision of and regular examination by the OCC, its primary regulator, and with respect to some matters, by the FDIC, its deposit insurer, and the CFPB.
Consumer Banking also provides a fully digital banking experience through its mobile banking apps and BrioDirect. Additional information regarding the Company’s reportable segments can be found in Part II under the section captioned “Segment Reporting” contained in Item 7.
Consumer Banking offers a full suite of deposit, lending, treasury management, and wealth management solutions. Consumer Banking also provides a fully digital banking experience through its mobile banking apps and BrioDirect. Additional information regarding the Company’s reportable segments can be found in Part II under the section captioned “Segment Reporting” contained in Item 7.
Investors are responsible for ensuring that they do not, directly or indirectly, acquire shares of Webster stock in excess of the amount that can be acquired without regulatory approval or notice under the BHC Act and the Change in Bank Control Act.
Investors are responsible for ensuring that they do not, directly or indirectly, acquire shares of Webster stock in excess of the amount that can be acquired without regulatory approval or notice under the BHC Act and the Change in Bank Control Act. The proposed Transaction with Banco Santander will be subject to relevant regulatory approvals.
Corporate Compliance, a second line function, manages compliance risk through the execution of a comprehensive Compliance Management Program, which is designed to identify and evaluate risks of non-compliance, assess, test, and monitor the effectiveness of internal controls, and report and escalate significant issues.
Corporate Compliance manages compliance risk through the execution of a comprehensive Compliance Management Program, which is designed to identify and evaluate risks of non-compliance, assess, test, and monitor the effectiveness of internal controls, and report and escalate significant regulatory compliance risks and issues. The Chief Compliance Officer is responsible for compliance risk oversight.
Risk-weighted assets serve as the base against which regulatory capital is measured, and are used to calculate the Company’s and the Bank’s minimum capital ratios of CET1 Risk-Based Capital, Tier 1 Risk-Based Capital, Total Risk-Based Capital, and Tier 1 Leverage Capital, as defined in the regulations, which the Company is required to maintain.
Risk-weighted assets serve as the base against which regulatory capital is measured, and are used to calculate capital ratios of CET1 Risk-Based Capital, Tier 1 Risk-Based Capital, Total Risk-Based Capital, and Tier 1 Leverage Ratio, as defined in the applicable regulations, which the Company and the Bank are required to maintain above certain specified minimums.
During the year ended December 31, 2024, the Bank declared and paid $600.0 million in dividends to the Holding Company and had $747.3 million of undistributed net income available for the declaration and payment of dividends at December 31, 2024.
During the year ended December 31, 2025, the Bank declared and paid $900.0 million in dividends to the Company and had $634.6 million of undistributed net income available for the declaration and payment of dividends at December 31, 2025.
Internal Audit undertakes these responsibilities through periodic reviews of Webster’s business activities, operations, and systems, and through special or retrospective reviews that may be specifically requested by the Audit Committee or management. Internal Audit is led by the Chief Audit Executive. 10 Table of Contents Information Risk Information risk encompasses Information Technology risk and Information Security risk.
Internal Audit undertakes these responsibilities through periodic reviews of Webster’s business activities, operations, and systems, and through special or retrospective reviews that may be specifically requested by the Audit Committee or management. The Chief Audit Executive leads Internal Audit.
In more serious instances, enforcement actions may include the issuance of directives to increase capital, the issuance of formal and informal agreements, the imposition of civil monetary penalties, the issuance of a cease and desist order that can be judicially enforced, the issuance of removal and prohibition orders against officers, directors, and other institution affiliated parties, the termination of the insured depository institution’s deposit insurance, the appointment of a conservator or receiver for the insured depository institution, and injunctions or restraining orders based upon a judicial determination that the FDIC, as receiver, would be harmed if such equitable relief was not granted. 6 Table of Contents Resolution Planning The FDIC requires certain insured depository institutions with more than $50 billion in total assets to periodically submit resolution plans to provide the FDIC with information about the bank that is essential to effective resolution planning and to support the execution of a resolution, if necessary.
In more serious instances, enforcement actions may include the issuance of directives to increase capital, the issuance of formal and informal agreements, the imposition of civil monetary penalties, the issuance of a cease and desist order that can be judicially enforced, the issuance of removal and prohibition orders against officers, directors, and other institution affiliated parties, the termination of the insured depository institution’s deposit insurance, the appointment of a conservator or receiver for the insured depository institution, and injunctions or restraining orders based upon a judicial determination that the FDIC, as receiver, would be harmed if such equitable relief was not granted.
The Company has adopted the Three Line Model of enterprise risk management, in which the First Line manages risks, ensures compliance, performs control activities, and works in coordination with the Second Line, who provides additional expertise, support, and tools, and challenges risk management to enhance efficiency and effectiveness of the control environment.
The Company has adopted the Three Lines of Defense Model. Under this model, the First Line manages risks, verifies compliance, performs control activities, and works in coordination with the Second Line. The Second Line provides expertise, support, and tools, and challenges the First Line to enhance efficiency and effectiveness of the control environment.
Our Business Resource Groups, which are open to all colleagues on a voluntary basis, are strategic partners who provide support for programs and initiatives that drive Webster’s efforts in recruitment and hiring, talent and leadership acquisition and development, employee retention and productivity, market development, and customer attraction and retention.
Our Business Resource Groups, open to all colleagues on a voluntary basis, are strategic partners who support programs and initiatives that advance talent acquisition and leadership development, colleague retention and productivity, market development, and customer attraction and retention.
As a registered bank holding company and a financial holding company, the Holding Company is subject to regulation under the BHC Act and to inspection, examination, and supervision by its primary federal regulator, the Board of Governors of the Federal Reserve System.
As a registered bank holding company that has elected to be treated as a financial holding company, the Company is subject to consolidated regulation, inspection, examination, and supervision under the BHC Act by its primary federal regulator, the Federal Reserve.
Risks are mitigated through the establishment of robust controls and documented policies and related procedures. A control is a specific activity, procedure, tool, or technical standard designed to satisfy the control objective and implemented within a business process to mitigate the impact and likelihood of associated inherent risk.
A control is a specific activity, procedure, tool, or technical standard designed to satisfy the control objective and implemented within a business process to mitigate the impact and likelihood of associated inherent risk.
Further, if an insured depository institution receives notice that it is under capitalized, significantly under capitalized, or critically under capitalized, the insured depository institution generally must file a written capital restoration plan with the appropriate federal banking agency within 45 days of receipt, and the bank holding company must guarantee the performance of that plan.
Further, if an insured depository institution receives notice that it is under capitalized, significantly under capitalized, or critically under capitalized, the insured depository institution generally must file a written capital restoration plan with the appropriate federal banking agency within 45 days of receipt, and the bank holding company must guarantee the performance of that plan. 5 Table of Contents Enhanced Prudential Standards The Federal Reserve established enhanced prudential standards for larger bank holding companies based on size and certain risk-based indicators.
Identity Theft Certain regulated entities are required to establish programs to address risks of identity theft. In accordance with these rules, financial institutions and creditors are required to develop and implement a written identity theft prevention program designed to detect, prevent, and mitigate identity theft in connection with certain existing accounts or the opening of new accounts.
In accordance with these rules, financial institutions and creditors are required to develop and implement a written identity theft prevention program designed to detect, prevent, and mitigate identity theft in connection with certain existing accounts or the opening of new accounts. The Company has an Identity Theft Prevention Program in place satisfying its compliance with these requirements.
ITEM 1. BUSINESS General Webster Financial Corporation is a bank holding company and financial holding company under the BHC Act, incorporated under the laws of Delaware in 1986, and headquartered in Stamford, Connecticut. As of December 31, 2024, Webster Financial Corporation had more than $79 billion in total consolidated assets.
ITEM 1. BUSINESS General The Company is a bank holding company that has elected to be treated as a financial holding company under the BHC Act, incorporated under the laws of Delaware in 1986, and headquartered in Stamford, Connecticut. As of December 31, 2025, the Company had $84.1 billion in total consolidated assets.
The approaches used to identify risk include process and data analysis, risk metrics, and risk assessments. Risks are assessed across all risk categories required by the OCC guidance, and include an assessment of inherent risk and residual risk after taking into account the effectiveness of the control environment.
The approaches used to identify risk include process and data analysis, risk metrics, and risk assessments. Risks are categorized using a risk taxonomy and are assessed across all applicable risk categories. This includes an assessment of inherent risk and residual risk after considering the effectiveness of the control environment.
Subsidiaries and Reportable Segments The Holding Company’s active consolidated subsidiaries include the Bank and MW Advisor Holding, LLC.
Subsidiaries and Reportable Segments As of December 31, 2025, the Company’s active consolidated subsidiaries included the Bank and MW Advisor Holding, LLC.
Independent Risk Management includes Enterprise Risk, which reports to the Chief Risk Officer, and Credit Risk Management which, reports to the Chief Credit Officer. Internal Audit, also referred to as the Third Line Function, independently assesses Webster’s risk management processes and controls using methodology developed from professional auditing standards and regulatory guidance.
The Chief Risk Officer and the Chief Credit Officer are Webster’s Chief Risk Executives. * Third Line of Defense: Internal Audit independently assesses Webster’s risk management processes and controls using methodology developed from professional auditing standards and regulatory guidance.
Banking statutes, regulations, and policies are continually under review by Congress, state legislatures, and federal and state regulatory agencies. Changes in the statutes, regulations, or regulatory policies applicable to the Holding Company and its bank and non-bank subsidiaries, including how they are implemented or interpreted, could have a material effect on the results of the Company.
Changes in the statutes, regulations, or policies applicable to the Company and its bank and non-bank subsidiaries, including how they are implemented or interpreted by regulators or by courts, could have a material effect on the results of the Company. Regulatory Agencies The Company is a separate and distinct legal entity from the Bank and its other subsidiaries.
Commercial Banking helps its clients achieve their business and financial goals with expertise in Commercial & Institutional Lending, Commercial Real Estate, Capital Markets, Capital Finance, and Treasury Management. Its Private Banking team also pairs holistic wealth solutions, including tailored lending, with commercial banking services. Healthcare Financial Services includes HSA Bank and Ametros.
Commercial Banking helps its clients achieve their business and financial goals with expertise in Commercial Real Estate, Middle Market, Sponsor and Specialty Finance, Verticals and Regional Banking, Asset Based Lending and Commercial Services, and Treasury Management. Commercial Banking’s Private Banking team also pairs holistic wealth solutions, including tailored lending, with commercial banking services.
The remaining 50% is subject to call by the Board of Governors of the Federal Reserve System. At December 31, 2024, the Bank held a stock investment in the FRB of New York of $229.6 million. Federal Home Loan Bank System The FHLB System provides a central credit facility for its member institutions.
At December 31, 2025, the Bank held a stock investment in the FRB of New York of $231.2 million. Federal Home Loan Bank System The FHLB System provides a central credit facility for its member institutions.
Depositor Preference In the event of the liquidation or other resolution of an insured depository institution, including the Bank, the claims of depositors of the institution (including the claims of the FDIC as subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution.
The Company’s management is not aware of any practice, violation, or condition that might lead to the termination of its deposit insurance. 9 Table of Contents Depositor Preference In the event of the liquidation or other resolution of an insured depository institution, including the Bank, the claims of depositors of the institution (including any claims of the FDIC as subrogee of depositors) and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution.
The Bank’s initial information filing submission is due on or before April 1, 2026. Dividends The Holding Company is dependent upon dividends from the Bank to provide funds for its cash requirements, including the payment of dividends to stockholders. Dividends paid by the Bank are subject to federal and state regulatory limitations.
Dividends The Company is dependent upon dividends from the Bank to provide funds for its cash requirements, including the payment of dividends to stockholders. Dividends paid by the Bank are subject to federal regulatory limitations.
As of December 31, 2024, the Company had 4,297 full-time employees and 110 part-time employees, comprised of 61 percent female and 39 percent male. Our employees are primarily located in our core footprint, which spans the Northeast from the New York metropolitan area to Rhode Island and Massachusetts, including our headquarters in Stamford, Connecticut.
As of December 31, 2025, the Company had 4,498 full-time employees and 103 part-time employees. Our employees are primarily located in our core footprint, which spans the Northeast from the New York metropolitan area to Rhode Island and Massachusetts, including our headquarters in Stamford, Connecticut. The average full-time and part-time employee tenure at the Company is approximately 8.9 years.
The Company has an Identity Theft Prevention Program in place satisfying its compliance with these requirements. 7 Table of Contents Financial Privacy and Data Security The Company is subject to federal and certain state laws and regulations containing consumer privacy and data protection provisions addressing the treatment of nonpublic personal information about consumers by financial institutions.
Financial Privacy and Data Security The Company is subject to federal and certain state laws and regulations containing consumer privacy and data protection provisions addressing the treatment of nonpublic personal information about consumers by financial institutions.
The OCC also has guidelines establishing heightened standards for large national banks, which establish minimum standards for the design and implementation of a risk governance framework. A large bank is defined as a bank with more than $50 billion in average total consolidated assets from its four most recently filed quarterly Call Reports.
A large bank is currently defined as a bank with more than $50 billion in average total consolidated assets from its four most recently filed quarterly Call Reports. Because the Bank is currently a covered bank, it has a risk governance framework designed to meet the OCC heightened standards.
Control of operational losses depends on identifying the types of transactions and operational risks faced at the enterprise and business level, and ensuring effective internal control processes are in place to mitigate these risks. The Head of Operational Risk is responsible for operational risk oversight.
Webster seeks to control operational risk within an acceptable range, determined by the types of businesses in which it engages. Control of operational losses depends on identifying the types of transactions and operational risks faced at the enterprise and business level, and ensuring effective internal control processes are in place to mitigate these risks.
Financial institutions are required to notify customers of security breaches that result in unauthorized access to their nonpublic personal information and its primary regulator of certain types of computer security incidents that result in harm to the confidentiality, integrity, or availability of an information system or the information that the system processes, stores, or transmits, as soon as possible and no later than 36 hours after the banking organization determines that a notification incident has occurred.
The expectation from the federal bank regulatory agencies is that financial institutions have established lines of defense to ensure that their risk management processes address the risks posed by compromised customer credentials, and that the financial institution has sufficient business continuity planning processes to ensure rapid recovery, resumption, and maintenance of operations after a cyber-attack. 8 Table of Contents Financial institutions are required to notify customers of security breaches that result in unauthorized access to their nonpublic personal information and its primary regulator of certain types of computer security incidents that result in harm to the confidentiality, integrity, or availability of an information system or the information that the system processes, stores, or transmits, as soon as possible and no later than 36 hours after the banking organization determines that a notification incident has occurred.
Certain of these competitors are larger financial institutions with substantially greater resources, lending limits, larger branch systems, and a wider array of commercial and consumer banking services than the Company.
Certain of these competitors are larger financial institutions with substantially greater resources, lending limits, larger branch systems, and a wider array of commercial and consumer banking services than the Company. Many of these competitors lack a physical presence within our geographic footprint, but actively pursue business through digital channels and other remote means.
Incentive Compensation The federal banking agencies have issued joint guidance on incentive compensation designed to ensure that the incentive compensation policies of banking organizations do not encourage imprudent risk taking and are consistent with the safety and soundness of the organization. We take this guidance into account as part of our compensation practices and enterprise risk management.
The regulations that govern interchange fees remains subject to ongoing litigation. Incentive Compensation The federal bank regulatory agencies have issued joint guidance on incentive compensation designed to ensure that the incentive compensation policies of banking organizations do not encourage imprudent risk taking and are consistent with the safety and soundness of the organization.
Further, the Change in Bank Control Act of 1978 prohibits the Company from acquiring control of a bank regulated by the FDIC without providing at least 60 days prior written notice to the FDIC or upon receipt of written notice that the FDIC does not disapprove of the acquisition.
Further, the Change in Bank Control Act of 1978 prohibits the Company from acquiring control of a bank regulated by the FDIC without providing at least 60 days prior written notice to the FDIC or upon receipt of written notice that the FDIC does not disapprove of the acquisition. 4 Table of Contents Capital Adequacy The Federal Reserve, the OCC, and the FDIC have adopted the regulatory capital standards in accordance with the Basel III Capital Rules, as developed by the Basel Committee on Banking Supervision.
Supervision and Regulation The Holding Company and its bank and non-bank subsidiaries are subject to extensive regulation under federal and state laws. The regulatory framework applicable to bank holding companies and their depository institutions is intended to protect depositors, the FDIF, consumers, and the U.S. banking system as a whole.
The regulatory framework applicable to bank holding companies and their depository institutions is intended to protect depositors, the DIF, consumers, and the U.S. banking system as a whole, not stockholders. Set forth below is a summary of the significant elements of the laws and regulations applicable to the Company and its bank and non-bank subsidiaries.
For those risks that cannot be controlled, management may decide to accept these risks, reduce the level of business activity, share or transfer the risks, or withdraw from the activity altogether. Impacts of risk can be both quantitative and qualitative.
For risks that cannot be controlled, First Line of Defense management may decide to accept the risks with agreement from relevant Second Line of Defense management, reduce the level of business activity, share or transfer the risks, or withdraw from the activity altogether.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Prolonged periods of inflation may further impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention. If significant inflation continues, our business could be negatively affected by, among other things, increased default rates leading to credit losses which could decrease our appetite for new credit extensions.
Prolonged periods of inflation may further impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention. If significant inflation continues, our business could be negatively affected by, among other things, increased default rates leading to credit losses which could decrease our appetite for new credit extensions.
Several states have also recently strengthened their data breach notification and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments, particularly if the CFPB is no longer enforcing federal financial institution consumer privacy laws and regulations.
Several states have also recently strengthened their data breach notification and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments, particularly if the CFPB is no longer actively enforcing federal financial institution consumer privacy laws and regulations.
The credit rating agencies regularly evaluate the Holding Company and the Bank, and credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including conditions affecting the financial services industry, the economy, and changes in rating methodologies.
The credit rating agencies regularly evaluate the Company and the Bank, and credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including conditions affecting the financial services industry, the economy, and changes in rating methodologies.
These dividends are the principal source of funds to pay dividends to common and preferred stockholders. Whether the Bank is able to pay dividends depends on its ability to generate sufficient net income and meet certain regulatory requirements, and the amount of such dividends may then be limited by federal and state laws.
These dividends are the principal source of funds to pay dividends to common and preferred stockholders. Whether the Bank is able to pay dividends depends on its ability to generate sufficient net income and meet certain regulatory requirements, and the amount of such dividends may then be limited by federal laws.
ITEM 1A. RISK FACTORS Investment in Webster stock involves risks and uncertainties, some of which are inherent in the financial services industry and others of which are more specific to our business.
ITEM 1A. RISK FACTORS Investment in our stock involves risks and uncertainties, some of which are inherent in the financial services industry and others of which are more specific to our business.
Consumers also have the option to direct us and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. 14 Table of Contents State regulators have also been increasingly active in implementing privacy and cybersecurity regulations.
Consumers also have the option to direct us and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. 30 Table of Contents State regulators have also been increasingly active in implementing privacy and cybersecurity regulations.
At December 31, 2024, approximately 75% of our loan and lease portfolio consisted of commercial non-mortgage, commercial real estate, and multi-family loans, and a large portion of the borrowers or properties associated with these loans are geographically concentrated in New York City and proximate areas.
At December 31, 2025, approximately 75% of our loan and lease portfolio consisted of commercial non-mortgage, commercial real estate, and multi-family loans, and a large portion of the borrowers or properties associated with these loans are geographically concentrated in New York City and proximate areas.
Failure to successfully keep pace with and adapt to technological change affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations. The loss of key partnerships could adversely affect our Healthcare Financial Services segment and interLINK operations.
Failure to successfully keep pace with and adapt to technological change affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations. The loss of key partnerships could adversely affect our Healthcare Financial Services segment and interSYNC operations.
Reputation Risk Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our corporate responsibility practices may impose additional costs on us or expose us to new or additional risks. Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their corporate responsibility practices and disclosure.
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our corporate responsibility practices may impose additional costs on us or expose us to new or additional risks. Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their corporate responsibility practices and disclosure.
Our ability to compete successfully depends on a number of factors, including, among other things: • the ability to develop, maintain, and build upon long-term customer relationships based on top quality service, high ethical standards, and safe, sound financial position; • the ability to expand our market position; • the scope, relevance, and pricing of products and services offered to meet customer needs and demands, including within the HSA market; • the rate at which we introduce new products and services relative to our competitors; • customer satisfaction with our level of service and products; and • industry and general economic trends.
Our ability to compete successfully depends on a number of factors, including, among other things: • the ability to develop, maintain, and build upon long-term customer relationships based on top quality service, high ethical standards, and safe, sound financial position; • the ability to expand our market position; • the scope, relevance, and pricing of products and services offered to meet customer needs and demands, including within the HSA market; • the rate at which we introduce new products and services relative to our competitors; • customer satisfaction with our level of service and products; • the quality of the technology that supports the customer experience; and • industry and general economic trends.
The enactment of future health care reform affecting HSAs and/or workers compensation at the federal or state level may affect our Healthcare Financial Services segment as a bank custodian of HSAs and insurance claim settlements.
Health care reform could adversely affect our Healthcare Financial Services segment. The enactment of future health care reform affecting HSAs and/or workers compensation at the federal or state level may affect our Healthcare Financial Services segment as a bank custodian of HSAs and insurance claim settlements.
Further, if we are the owner or former owner of a contaminated site, we may be subject to common law claims based on damages and costs incurred by others due to environmental contamination emanating from the property. These remediation costs and liabilities could have a material adverse effect on our financial condition and results of operations.
Further, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs incurred by others due to environmental contamination emanating from the property. These remediation costs and liabilities could have a material adverse effect on our business, financial condition, and results of operations.
A significant decline in our expected future cash flows, a continued period of local and national economic disruption, changes to financial markets, slower growth rates, or other external factors, all of which can be highly unpredictable, may impact fair value calculations and require us to recognize an impairment loss in the future.
A significant decline in our expected future cash flows, a continued period of local and national economic disruption, changes to financial markets, slower growth rates, or other external factors, all of which can be highly unpredictable, may impact fair value calculations and require us to recognize an impairment 28 Table of Contents loss in the future.
Such changes could subject us to additional costs, limit the types of financial services and products we may offer, and restrict what we are able to charge for certain banking services, or lead to regulatory uncertainty.
Such changes could subject us to additional costs, limit the types of financial services and products we may offer, and affect what we are able to charge for certain banking services, or lead to regulatory uncertainty.
Moreover, organizations that are larger than we are may be able to achieve greater economies of scale or offer a broader range of products and services, or better pricing on products and services, than what we can offer. The financial services industry could become even more competitive as a result of legislative and regulatory changes, and continued consolidation.
Moreover, organizations that are larger than we are may be able to achieve greater economies of scale or offer a broader range of products and services, or better pricing on products and services, than what we can offer. 31 Table of Contents The financial services industry could become even more competitive as a result of legislative and regulatory changes, and continued consolidation.
The physical risks of climate change include discrete events, such as flooding and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought.
The physical risks of climate change include discrete events, such as flooding, wildfires, and other climate-related events, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought.
The unexpected loss of services of our key personnel could have a material adverse impact on the business because of their skills, knowledge of our markets, years of industry experience, and the difficulty of promptly finding qualified replacement personnel. 24 Table of Contents Further, our business is primarily relationship-driven, in that many of our key employees have extensive customer relationships.
The unexpected loss of services of our key personnel could have a material adverse impact on the business because of their skills, knowledge of our markets, years of industry experience, and the difficulty of promptly finding qualified replacement personnel. Further, our business is primarily relationship-driven, in that many of our key employees have extensive customer relationships.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, the competitive environment within our markets, consumer preferences for specific loan and deposit products, and policies of various governmental and regulatory agencies, in particular the FRB.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, the competitive environment within our markets, consumer preferences for specific loan and deposit products, and policies of various governmental and regulatory agencies, in particular the Federal Reserve.
Under such enhanced prudential standards, Category IV bank holding companies are subject to greater regulation and supervision, including, but not limited to: certain capital planning and stress testing and capital buffer requirements; supervisory capital stress testing conducted by the FRB biennially; and certain liquidity risk management and liquidity stress testing and buffer requirements.
Under such enhanced prudential standards, Category IV bank holding companies are subject to greater regulation and supervision, including, but not limited to: certain capital planning and stress testing and capital buffer requirements; supervisory capital stress testing conducted by the Federal Reserve biennially; and certain liquidity risk management and liquidity stress testing and buffer requirements.
Such events could disrupt our operations, those of our customers, or third parties on which we rely, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility. In addition, transitioning to a low-carbon economy may entail extensive policy, legal, technological, and market initiatives.
Such events could disrupt our operations, those of our customers, or third parties on which we rely, including through direct damage to assets, such as those securing certain loans, and indirect impacts from supply chain disruption and market volatility. In addition, transitioning to a low-carbon economy may entail extensive policy, legal, technological, and market initiatives.
Moreover, we expect such costs to increase significantly as we approach that size. Regulatory restrictions and costs tend to increase based on a bank holding company’s consolidated asset tier. Becoming subject to Category IV enhanced prudential standards will have the most significant impact on us after we cross the $100 billion in assets threshold.
Moreover, we expect such costs to increase significantly as we approach that size. Regulatory restrictions and costs tend to increase based on a bank holding company’s and bank’s consolidated asset tiers. Becoming subject to Category IV enhanced prudential standards will have the most significant impact on us after we cross the $100 billion in total consolidated assets threshold.
The development and use of AI presents risks and challenges that may adversely impact our business. We are in the early stages of incorporating AI into our business activities to increase employee productivity. We have not yet deployed AI-driven systems in critical decision-making or client-facing processes.
The development and use of AI, including by third parties, presents risks and challenges that may adversely impact our business. We are in the early stages of incorporating AI into our business activities to increase employee productivity. We have not yet deployed AI-driven systems in critical decision-making or client-facing processes.
Many of these transactions could expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be impacted if the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of our investment in the financial instrument.
Many of our transactions with other financial institutions could expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be impacted if the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of our investment in the financial instrument.
Difficult economic conditions or adverse changes in such local markets, whether caused by inflation, recession, unemployment, changes in housing or securities markets, or other factors, could reduce demand for our loans and deposits, increase problem loans and charge-offs, cause a decline in the value of collateral securing loans, and otherwise negatively affect our performance and financial condition.
Difficult economic conditions or adverse changes in such local markets, whether caused by inflation, recession, unemployment, changes in housing or securities markets, or other factors, could reduce demand for our loans and deposits, increase problem loans and charge-offs, affect the ability of borrowers to repay their loans, cause a decline in the value of collateral securing loans, and otherwise negatively affect our performance and financial condition.
The availability of deposits can also be impacted by regulatory changes (e.g., changes in FDIC insurance, liquidity requirements, healthcare reform etc.), changes in financial condition of the Bank, other banks, or the banking industry in general, changes in the interest rates our competitors pay on their deposits, and other events which can impact the perceived safety or economic benefits of bank deposits.
The availability of deposits can also be impacted by regulatory changes (e.g., changes in FDIC insurance, liquidity requirements, healthcare reform, legislation and regulation regulated to stablecoins, etc.), changes in financial condition of the Bank, other banks, or the banking industry in general, changes in the interest rates our competitors pay on their deposits, and other events which can impact the perceived safety or economic benefits of bank deposits.
Rising interest rates, disruptions in financial markets, negative perceptions of our business or our financial strength, negative perceptions of the overall banking industry or of other regional banks, or other factors may impact our ability to raise additional capital, if needed, on terms acceptable to us.
Heightened interest rates, disruptions in financial markets, negative perceptions of our business or our financial strength, negative perceptions of the overall banking industry or of other regional banks, or other factors may impact our ability to raise additional capital, if needed, on terms acceptable to us or at all.
The Order requires relevant persons and bodies within the federal government to develop an AI action plan to carry out this objective and revokes prior AI-related Executive Orders, as well as all corresponding policies, regulations, order, directives, and other actions taken in response to such Order.
The Executive Order issued on January 23, 2025, requires relevant persons and bodies within the federal government to develop an AI action plan to carry out this objective and revokes prior AI-related Executive Orders, as well as all corresponding policies, regulations, order, directives, and other actions taken in response to such Executive Order.
We are subject to changes in tax laws that could increase our effective tax rates or cause an increase or decrease in our income tax liabilities. These law changes may be retroactive to previous periods and as a result, could negatively impact our current and future financial performance. We are subject to examinations and challenges by taxing authorities.
We are subject to changes in tax laws that could increase our effective tax rates or cause an increase or decrease in our income tax liabilities. These law changes may be retroactive to previous periods and as a result, could negatively impact our current and future financial performance.
Government services and federal program funds and benefits may be disrupted or eliminated which could adversely affect regional and local economies and our customers, and thus our business, results of operations and financial condition.
Government services and federal program funds and benefits have been and may continue to be disrupted or eliminated which could adversely affect regional and local economies and our customers, and thus our business, results of operations and financial condition.
Our Healthcare Financial Services segment and interLINK operations rely on partnerships to maximize our distribution model.
Our Healthcare Financial Services segment and interSYNC operations rely on partnerships to maximize our distribution model.
An increase in the ACL would result in a decrease in net income, and could have a material adverse effect on our financial condition, results of operations, and regulatory capital position. The soundness of other financial institutions could adversely affect our business.
An increase in the ACL would result in a decrease in net income, and could have a material adverse effect on our financial condition, results of operations, and regulatory capital position. The soundness of other financial institutions and other third parties, actual or perceived, could adversely affect our business.
The Holding Company may not pay dividends to stockholders if it is not able to receive dividends from its subsidiary, Webster Bank. The Holding Company is a separate and distinct legal entity from the Bank and its non-banking subsidiaries. A substantial portion of the Holding Company’s revenues comes from dividends paid by the Bank.
The Company may not pay dividends to stockholders if it is not able to receive dividends from its subsidiary, the Bank. The Company is a separate and distinct legal entity from the Bank and its non-banking subsidiaries. A substantial portion of the Company’s revenues are derived from dividends paid to it by the Bank.
It could also result in us being required to take steps to increase our regulatory capital that may be dilutive to stockholders or limit our ability to pay dividends, or sell or refrain from acquiring assets. Our ability to grow is contingent upon access to capital, which may not be readily available to us.
Any changes in the applicable regulations could also result in us being required to take steps to increase our regulatory capital that may be dilutive to stockholders or limit our ability to pay dividends, or sell or refrain from acquiring assets. Our ability to grow is contingent upon access to capital, which may not be readily available to us.
Our stock price can fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated variations in results of operations; • recommendations or projections by securities analysts; • operating and stock price performance of other companies that investors deem comparable to us; • news reports relating to trends, concerns, and other issues in the financial services and healthcare industries; • perceptions in the marketplace regarding us and/or our competitors; • new technology used, or services offered, by competitors; • significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors; • changes in dividends and capital returns; • issuance of additional shares of Webster common stock; • changes in government regulations; and • geopolitical conditions such as acts or threats of terrorism or military conflicts, including any military conflict between Russia and Ukraine, or actions between Israel and its neighbors.
Our stock price can fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated variations in results of operations; • recommendations or projections by securities analysts or failure to meet their expectations; • operating and stock price performance of other companies that investors deem comparable to us; • news reports relating to trends, concerns, and other issues in the financial services and healthcare industries; 24 Table of Contents • perceptions in the marketplace regarding us and/or our competitors; • new technology used, or services offered, by competitors; • significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors; • changes in dividends and capital returns; • issuance of additional shares of Webster common stock; • changes in government regulations; and • geopolitical conditions such as acts or threats of terrorism or military conflicts, including the ongoing military conflict between Russia and Ukraine, or the conflicts in the Middle East.
Our preparations for, and the application of, these enhanced prudential standards and resolution planning requirements for our depository institution could adversely affect our results of operations and financial performance through additional capital and liquidity requirements and increased compliance costs. Compliance costs associated with those and other Category IV regulations are expected to be significant.
Our preparations for, and the application of, these enhanced prudential standards and resolution planning requirements for our depository institution could adversely affect our results of operations and financial performance through additional capital and liquidity requirements and increased compliance costs. Compliance costs associated with those and other Category IV regulations have historically been significant.
Although the rate of inflation lowered in 2024 after rising sharply in 2022 and 2023, certain policy changes or actions during the Trump Administration, such as increased tariffs, may increase the risk that inflation will rise again.
Although the rate of inflation fell in 2024 and 2025, after rising sharply in 2022 and 2023, certain policy changes or actions, such as increased tariffs, may increase the risk that inflation will rise again.
Any failure or perceived failure (whether or not valid) to pursue or fulfill our sustainability goals and aspirations, to comply with evolving regulatory requirements, or to meet investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and the price of our stock.
Any success, failure, or perceived success or failure (whether or not valid) to pursue or fulfill corporate responsibility-related objectives, comply with evolving regulatory requirements, or meet investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and the price of our stock.
As a result, defaults by, or even rumors or questions about one or more financial services companies, or the financial services industry in general, have led, and may further lead to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions.
As a result, defaults by, or even speculation regarding fragility at one or more financial services companies, or the financial services industry in general, have led, and may further lead to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions.
In particular, we could face some of the following risks in connection with a downturn in the U.S. economic and market environment: • loss of confidence in the financial services industry and the debt and equity markets by investors, placing pressure on our common share price; • decreased consumer and business confidence levels may decrease credit usage and investment or increase in delinquencies and default rates; • decreased household or corporate incomes, which could reduce demand for our products and services; • decreased value of collateral securing loans to borrowers, causing a decrease in the asset quality of our loan and lease portfolio and/or an increase in charge-offs; • decreased confidence in the creditworthiness of the U.S. government and agency securities that we hold; • increased concern over and scrutiny of capital and liquidity levels; • increased competition or consolidation in the financial services industry; and • increased limitations on or potential additional regulation of financial service companies.
In particular, we could face some of the following risks in connection with adverse economic conditions in the U.S. economic and market environment: • loss of confidence in the financial services industry and the debt and equity markets by investors, placing pressure on our common share price; • decreased consumer and business confidence levels may decrease the demand for credit and investment, or increase in delinquencies and default rates; • decreased household or corporate incomes, which could reduce customer purchasing power, confidence and spending, as well as demand for our products and services; • decreased value of collateral securing loans to borrowers, causing a decrease in the asset quality of our loan and lease portfolio and/or an increase in charge-offs; • changes in usage of commercial real estate, which may have sustained negative impact on utilization rates and values; • decreased confidence in the creditworthiness of the U.S. government and agency securities that we hold; • increased concern over and scrutiny of capital and liquidity levels; • increased cost of capital and labor; • increased competition or consolidation in the financial services industry; and • increased limitations on or potential additional regulation of financial service companies.
In response to these inflationary pressures, the FRB has raised benchmark interest rates in the past and may continue to raise interest rates in response to economic conditions, particularly in a continued high rate of inflation. Amidst these uncertainties, financial markets have continued to experience volatility.
In response to these inflationary pressures, the Federal Reserve raised benchmark interest rates in the past, and may cause the Federal Reserve to raise interest rates again in response to economic conditions, particularly in a continued high rate of inflation. Amidst these uncertainties, financial markets have continued to experience volatility.
The success of our business is dependent on the general economic conditions of the significant markets in which we operate, particularly Connecticut, Massachusetts, Rhode Island, New York, and New Jersey.
Our profitability depends significantly on local economic conditions in the states in which we conduct business. The success of our business is dependent on the general economic conditions of the significant markets in which we operate, particularly Connecticut, Massachusetts, Rhode Island, New York, and New Jersey.
The risks associated with these types of loans could have a significant negative affect on our earnings in any quarter, which could have a material adverse affect on our business, financial condition, and results of operations. We are subject to commercial lending concentration risks.
The risks associated with these types of loans could have a significant negative affect on our earnings in any quarter, which could have a material adverse affect on our business, financial condition, and results of operations.
We rely on financial and economic models to measure risks, estimate certain financial values, and inform certain business decisions. Models may be used in processes such as risk management, asset management, valuation, capital and reserve calculations, and financial reporting.
There may be risks resulting from the extensive use of models in our business. We rely on financial and economic models to measure risks, estimate certain financial values, and inform certain business decisions. Models may be used in processes such as risk management, asset management, valuation, capital and reserve calculations, and financial reporting.
GAAP requires us to record the assets and liabilities of an acquired business to their fair values at the time of the acquisition. With larger transactions, fair value and other estimations can take up to four quarters to finalize.
A significant merger or acquisition requires us to make estimates, including the fair values of assets acquired and liabilities assumed. GAAP requires us to record the assets and liabilities of an acquired business to their fair values at the time of the acquisition. With larger transactions, fair value and other estimations can take up to four quarters to finalize.
As of December 31, 2024, we had more than $79 billion in assets on a consolidated basis.
As of December 31, 2025, we had more than $84 billion in assets on a consolidated basis.
Due to divergent stakeholder views on these matters, we are at increased risk that any action, or lack thereof, concerning these matters will be perceived negatively by some stakeholders, which could negatively affect our business and reputation.
Due to divergent stakeholder views, priorities and expectations on these matters, we are at increased risk that any action, or lack thereof, concerning these matters will be perceived negatively by some stakeholders.
In its assessment of the failures of Silicon Valley Bank and Signature Bank in the first quarter of 2023, the FDIC concluded that a significant contributing factor to the failures of these institutions was the proportion of deposits held by each institution that exceeded FDIC insurance limits.
Various assessments of the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank in the first half of 2023 concluded that a significant contributing factor to the failures was the proportion of deposits held by each institution that exceeded FDIC insurance limits.
If these health plan partners or other partners choose to align with our competitors or develop their own solutions, our business, financial condition, and results of operations could be adversely affected. 25 Table of Contents There is significant competition for our existing partners, and our failure to retain our existing larger partner relationships upon expiration or the earlier loss of a relationship upon the exercise of a partner’s early termination rights, or the expiration or termination of a substantial number of small partner relationships, could have a material adverse effect on our results of operations (including growth rates) and financial condition to the extent that we do not acquire new partners of similar size and profitability or otherwise grow our business.
There is significant competition for our existing partners, and our failure to retain our existing larger partner relationships upon expiration or the earlier loss of a relationship upon the exercise of a partner’s early termination rights, or the expiration or termination of a substantial number of small partner relationships, could have a material adverse effect on our results of operations (including growth rates) and financial condition to the extent that we do not acquire new partners of similar size and profitability or otherwise grow our business.
Although we devote substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the increasing sophistication of possible perpetrators, we may experience financial losses or reputational harm as a result of fraud. Our internal controls may be ineffective, circumvented, or fail.
Although we devote substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the increasing sophistication of possible perpetrators, we may experience financial losses or reputational harm as a result of fraud, including from risks that we have not appropriately anticipated, monitored, or identified. 25 Table of Contents Our internal controls may be ineffective, circumvented, or fail.
Any such losses could materially or adversely affect our business, financial condition, or results of operations. 17 Table of Contents We are subject to the risk of default by our counterparties and clients, particularly with respect to certain types of commercial loans.
Any such losses could materially or adversely affect our business, financial condition, or results of operations. We are subject to the risk of default by our counterparties and clients, particularly with respect to certain types of commercial loans. Many of our routine transactions expose us to credit risk in the event of default of our counterparties or clients.
Many of our routine transactions expose us to credit risk in the event of default of our counterparties or clients. Our credit risk may be exacerbated when the collateral held cannot be realized or is liquidated at prices insufficient to cover the full amount of the loan or derivative exposure to us.
Our credit risk may be exacerbated when the collateral held cannot be realized or is liquidated at prices insufficient to cover the full amount of the loan or derivative exposure to us.
If financial markets remain volatile or if the aforementioned conditions result in further economic stress or recession, the performance of various segments of our business, including the value of our investment securities portfolio, could be significantly impacted.
If financial markets remain volatile or if the aforementioned conditions result in further economic stress or recession, the performance of various segments of our business, including the value of our investment securities portfolio, could be significantly impacted, with the significance of the impact generally depending on the nature and severity of the adverse economic conditions.
Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible.
In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible.
Our ability to access the capital markets, if needed, will depend on a number of factors, including the state of the financial markets.
Our ability to borrow from other financial institutions or access the capital markets, if needed, will depend on a number of factors outside of our control, including the state of the financial markets.
On occasion, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources.
Risks Related to Strategy New lines of business or new products and services may subject us to additional risk. On occasion, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where markets are not fully developed.
We face risks related to the adoption of future legislation and potential changes in federal regulatory agency leadership, policies, and priorities. Changes in key personnel at the regulatory agencies, including the federal banking regulators, may result in differing interpretations of rules and guidelines, including more stringent enforcement and more severe penalties than previously. Disagreements between, or in, the U.S.
Changes in key personnel at the regulatory agencies, including the federal banking regulators, may result in differing interpretations of rules and guidelines, including more stringent enforcement and more severe penalties than previously. Disagreements between, or in, the U.S.
The U.S. economy and financial markets have experienced volatility in recent years and may continue to do so in the foreseeable future. Robust demand, labor shortages and supply chain constraints has led to persistent inflationary pressures throughout the economy.
The U.S. economy and financial markets have experienced volatility in recent years and may continue to do so in the foreseeable future. Robust demand, labor shortages, supply chain constraints, structural and secular changes, and tariffs and other trade policies, as well as geographical tensions and other conditions, have led to persistent inflationary pressures throughout the economy.
In addition, a prolonged period of inflation could cause an increase in wages and other costs to the Company. These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer.
In addition, a prolonged period of inflation could cause an increase in wages and other costs to the Company. These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer. We continue to closely monitor the pace of inflation and the impacts of inflation on the larger market, including labor and supply chain impacts.
The Trump Administration has started to implement significant changes to the size of the federal government. To date, we have seen executive actions to eliminate or modify federal agency and federal program funding, reduce the size of the federal workforce and minimize the oversight of certain federal agencies, and encourage the use of AI and other advanced technologies.
To date, there have been executive actions to eliminate or modify federal agency and federal program funding, reduce the size of the federal workforce and minimize the oversight of certain federal agencies, and encourage the use of AI and other advanced technologies.
A project’s failure to realize these tax credits and other tax benefits may have a negative impact on our investment, and as a result, on our financial condition and results of operations. Strategic Risk New lines of business or new products and services may subject us to additional risk.
A project’s failure to realize these tax credits and other tax benefits may have a negative impact on our investment, and as a result, on our financial condition and results of operations.
Significant estimates subject to change include, among other items, the allowance for credit losses, the carrying value of goodwill or other intangible assets, the fair value estimates of certain assets and liabilities, and the realization of deferred tax assets and liabilities. 23 Table of Contents A significant merger or acquisition requires us to make estimates, including the fair values of assets acquired and liabilities assumed.
Significant estimates subject to change include, among other items, the allowance for credit losses, the carrying value of goodwill or other intangible assets, the fair value estimates of certain assets and liabilities, and the realization of deferred tax assets and liabilities.
Therefore, our residential mortgage performance is typically correlated to fluctuations in interest rates. The sustained higher rates experienced throughout 2022 and 2023, and into 2024, have negatively impacted the mortgage market, including our loan origination volume and refinancing activity.
Lower interest rates generally increase the volume of mortgage originations and refinancing, while higher interest rates generally cause that volume to decrease. Therefore, our residential mortgage performance is typically correlated to fluctuations in interest rates. The sustained higher rates experienced between 2022 and into 2025, have negatively impacted the mortgage market, including our loan origination volume and refinancing activity.
However, because the timing and impact of climate change have limited predictability, our risk management strategies may not be effective in mitigating climate risk exposure. 16 Table of Contents There may be risks resulting from the extensive use of models in our business.
However, because the timing and impact of climate change have limited predictability, our risk management strategies may not be effective in mitigating climate risk exposure.
This could affect our growth, profitability, and financial condition, including liquidity. 22 Table of Contents Our stock price can be volatile. Stock price volatility may make it more difficult for stockholders to resell their common stock when they want and at prices that they find attractive.
Our stock price can be volatile. Stock price volatility may make it more difficult for stockholders to resell their common stock when they want and at prices that they find attractive.
Moreover, we expect that a significant portion of those compliance costs to be incurred as we approach the $100 billion tier, rather than commence abruptly when we become a Category IV bank, as we upgrade compliance systems, processes, and staffing before they are fully needed. Changes in federal, state, or local tax laws may negatively impact our financial performance.
Moreover, we expect that a significant portion of those compliance costs to be incurred as we approach the $100 billion tier, rather than commence abruptly when we become a Category IV bank, as we upgrade compliance systems, processes, and staffing before they are fully needed. We are subject to examinations and challenges by taxing authorities.
Additional information regarding our commercial lending business can be found in Part II under the section captioned “Loans and Leases” contained in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Compliance Risk We are subject to extensive government regulation and supervision, which may interfere with our ability to conduct our business operations.
Additional information regarding our commercial lending business can be found in Part II under the section captioned “Loans and Leases” contained in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We are subject to financial and reputational risks from potential liability arising from lawsuits. The nature of our business ordinarily results in certain legal proceedings and claims.
In addition, our results of operations, financial position, and cash flows could be materially adversely affected by such changes. We are subject to financial and reputational risks from potential liability arising from lawsuits. The nature of our business ordinarily results in certain legal proceedings and claims.
For instance, we depend on our vendor-provided core banking processing systems to process a large number of increasingly complex transactions on a daily basis.
Risks Related to Operations We rely on third parties to perform significant operational services for us. Third parties perform significant operational services on our behalf. For instance, we depend on our vendor-provided core banking processing systems to process a large number of increasingly complex transactions on a daily basis.
Increased interest rates may decrease demand for interest-rate based products and services, including loans and deposits, and make it more difficult for borrowers to meet obligations under variable-rate or adjustable-rate loans and other debt instruments. Decreased interest rates often increase prepayments on loans and securities as borrowers refinance their loans to reduce borrowing costs.
Increased interest rates may decrease demand for interest-rate based products and services, including loans and deposits; make it more difficult for borrowers to meet obligations under variable-rate or adjustable-rate loans and other debt instruments; increase our borrowing costs; and require us to increase the interest we pay on funds deposited with us; and reduce the market value of our securities holdings.
Failure to comply with laws, regulations, or policies could result in sanctions by regulatory agencies, civil penalties, and reputation damage, which could have a material adverse effect on our business, financial condition, and results of operations.
Failure to comply with laws, regulations, or policies could result in sanctions by regulatory agencies, civil penalties, and reputation damage, which could have a material adverse effect on our business, financial condition, and results of operations. While we have policies and procedures designed to prevent these types of violations, there can be no assurance that such violations will not occur.
In the absence of comprehensive federal regulation and oversight, we could become increasingly burdened by a patchwork of overlapping by differing state and local laws, rules, and regulations, which would increase uncertainty with respect to certain matters and require us to incur additional costs and expenses in an effort to comply.
If there is an absence of, or significant decrease in, comprehensive federal regulation and oversight, we could become increasingly burdened by a patchwork of overlapping by differing state and local laws, rules, and regulations, which would increase uncertainty with respect to certain matters and require us to incur additional costs and expenses in an effort to comply. 29 Table of Contents Regulatory compliance expense may increase substantially when we reach $100 billion in assets, which is the next regulatory tier above us now.
Additionally, significant unrealized losses could negatively impact market and/or customer perceptions of us, which could lead to a loss of depositor confidence and result in an increase in withdrawals, particularly among those with uninsured deposits.
Additionally, significant unrealized losses could negatively impact market and/or customer perceptions of us, which could lead to a loss of depositor confidence and result in an increase in withdrawals, particularly among those with uninsured deposits. In addition, we experienced significant unrealized losses on our available-for-sale securities portfolio as market rates increased over the past few years.
As a financial services company, our business and overall financial performance is highly dependent upon the U.S. economy and strength of its financial markets. Difficult economic and market conditions could adversely affect our business, results of operations, and financial condition. The risks associated with our business become more acute in periods of a slowing economy or slow growth.
Difficult economic and market conditions could adversely affect our business, results of operations, and financial condition. 22 Table of Contents The risks associated with our business become more acute in periods of a slowing economy or slow growth.
The inaccuracy of that information or those representations affects our ability to evaluate the default risk of a counterparty or client accurately and could cause us to enter into unfavorable transactions, which could have a material adverse effect on our financial condition and results of operations.
The inaccuracy of that information or those representations affects our ability to evaluate the default risk of a counterparty or client accurately and could cause us to enter into unfavorable transactions, which could have a material adverse effect on our financial condition and results of operations. 20 Table of Contents In addition, we consider our commercial real estate loans and commercial and industrial loans to be higher risk categories in our loan portfolio because these loans are particularly sensitive to economic conditions.
In addition, existing relationships may be renewed with less favorable terms to the Company in response to increased competition for such relationships. The competition for new partners is also significant, and our failure to attract new partners could adversely affect our ability to grow.
In addition, existing relationships may be renewed with less favorable terms to the Company in response to increased competition for such relationships.
We may not be able to successfully implement current or future information technology system enhancements and operational initiatives, which could adversely affect our business operations and profitability.
As cybersecurity threats and related regulations continue to evolve, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate any information security vulnerabilities. We may not be able to successfully implement current or future information technology system enhancements and operational initiatives, which could adversely affect our business operations and profitability.
Our vendors or third parties may develop or incorporate AI technology in certain business processes, services, or products. Any reliance on AI presents a number of risks and challenges to our business. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, both in the U.S. and internationally, and includes regulatory schemes targeted specifically at AI.
Our vendors or third parties may develop or incorporate AI technology in certain business processes, services, or products. Any reliance on AI presents a number of risks 26 Table of Contents and challenges to our business.
We are exposed to environmental liability risk with respect to properties to which we obtain title. A significant portion of our loan portfolio is secured by real property.
Furthermore, ongoing legislative or regulatory uncertainties and changes regarding climate-related matters may result in higher regulatory, compliance, credit, and other risks and costs. We are exposed to environmental liability risk with respect to properties to which we obtain title. A significant portion of our loan portfolio is secured by real property.
The financial services industry also faces increasing competitive pressure from the introduction of disruptive new technologies, such as blockchain and digital payments, often by non-traditional competitors and financial technology companies. Among other things, technology and other changes are allowing customers to complete financial transactions that historically have involved banks at one or both ends of the transaction.
Among other things, technology and other changes are allowing customers to complete financial transactions that historically have involved banks at one or both ends of the transaction.
As a financial institution, we depend on our ability to process, record, and monitor a large number of customer transactions. Accordingly, our operational systems and technology infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, and breakdowns.
Accordingly, our operational systems and technology infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, and breakdowns.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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On at least a quarterly basis, the Corporate Information Security team provides reports on updates to the Company’s information risk profile, emerging risks and threats, results of examinations, status of remediation plans and/or results of remediation activities, risk reports and risk assessment results, and risk metric results to the Information Risk Committee, who then provides such information to the Enterprise Risk Management Committee and the Risk Committee of the Board of Directors.
On at least a quarterly basis, the Corporate Information Security team provides reports on updates to the Company’s information risk profile, emerging risks and threats, results of examinations, status of remediation plans and/or results of remediation activities, risk reports and risk assessment results, and risk metric results to the Information Risk Committee, who then provides such information to the Enterprise Risk Management Committee and the Risk Committee of the Board.
The Company will engage third party specialists to assist in any cybersecurity incident investigation, as needed. Cybersecurity threats that are identified and deemed material are escalated and communicated directly to Senior and Executive Management and the Risk Committee of the Board of Directors.
The Company will engage third party specialists to assist in any cybersecurity incident investigation, as needed. Cybersecurity threats that are identified and deemed material are escalated and communicated directly to Senior and Executive Management and the Risk Committee of the Board.
In addition, on at least a quarterly basis, this information, along with updates on key cybersecurity initiatives, is shared with the Technology Committee of the Board of Directors, who provides oversight on information security and information technology strategy and governance.
In addition, on at least a quarterly basis, this information, along with updates on key cybersecurity initiatives, is shared with the Technology Committee of the Board, who provides oversight on information security and information technology strategy and governance.
Materiality determinations are made under the Company’s Disclosure Controls and Procedures to ensure timely cybersecurity incident disclosure notification in accordance with securities laws and/or regulations. Material Cybersecurity Threat Risks. Risks from cybersecurity threats have not materially affected the Company, its business strategy, results of operations, or financial condition for the year ended December 31, 2024.
Materiality determinations are made under the Company’s Disclosure Controls and Procedures to ensure timely cybersecurity incident disclosure notification in accordance with securities laws and/or regulations. Material Cybersecurity Threat Risks. Risks from cybersecurity threats have not materially affected the Company, its business strategy, results of operations, or financial condition for the year ended December 31, 2025.
Oversight of information security risk and information technology risk is the responsibility of the Information Risk Committee, a management committee, with additional oversight from the Enterprise Risk Management Committee, a management committee, and the Risk and Technology Committees of the Board of Directors.
Oversight of information security risk and information technology risk is the responsibility of the Information Risk Committee, a management committee, with additional oversight from the Enterprise Risk Management Committee, a management committee, and the Risk and Technology Committees of the Board.
Additional information regarding the Company’s risk management framework, including management-level and Board-level committee experience and expertise, oversight responsibilities, and information risk governance, can be found under the section captioned “Risk Management Framework” contained in Item 1. Business. 28 Table of Contents
Additional information regarding the Company’s risk management framework, including management-level and Board-level committee experience and expertise, oversight responsibilities, and information risk governance, can be found under the section captioned “Risk Governance Framework” contained in Item 1. Business. 35 Table of Contents
However, it is possible that the Company could suffer such losses in the future. Information regarding risks from material cybersecurity threats can be found under the section captioned “Information Risk” contained in Item 1A. Risk Factors. Governance.
However, it is possible that the Company could suffer such losses in the future. Information regarding risks from material cybersecurity threats can be found under the section captioned “Operational Risk” contained in Item 1A. Risk Factors. Governance.
The Company has a Technology Risk Management Program (First Line), including Cyber and Information Risk Management, and an Information Risk Management Program (Second Line) under its Enterprise Risk Management Framework for the identification, assessment, measurement, mitigation, monitoring, and internal reporting of risks associated with its information systems, information assets, and third parties, including vendors and service providers.
The Company has a Technology Risk Management Program (First Line), including Cyber and Information Risk Management, a First Line Control Office, and an Information Risk Management Program (Second Line) under its Risk Governance Framework for the identification, assessment, measurement, mitigation, monitoring, and internal reporting of risks associated with its information systems, information assets, and third parties, including vendors and service providers.
The Company’s Corporate Information Security team members are also responsible for completing additional mandatory annual training to understand the processes, procedures, and technical requirements for securing information assets across the enterprise.
Employees are assigned incremental training requirements should they fail to identify simulated phishing emails through the initial training. The Company’s Corporate Information Security team members are also responsible for completing additional mandatory annual training to understand the processes, procedures, and technical requirements for securing information assets across the enterprise.
On average, the other Corporate Information Security team members have over a decade of cybersecurity experience and hold over 100 industry-leading certifications in cybersecurity.
Both our CISO and CIO also participate in various financial services industry committees and cybersecurity advisory boards. On average, the other Corporate Information Security team members have over a decade of cybersecurity experience and hold over 100 industry-leading certifications in cybersecurity.
Tabletop exercises are held regularly at the Senior and Executive management levels to validate roles and responsibilities and response protocols respective to cybersecurity threats. The outcomes of these tabletop exercises are reviewed annually at the Board of Directors level.
Tabletop exercises are held regularly at the Senior and Executive management levels to validate roles and responsibilities and response protocols respective to cybersecurity threats. The outcomes of these tabletop exercises are reviewed annually at the Board level. Employees, contractors, and third parties are required to immediately report any suspected cybersecurity threats to the Corporate Information Security team for triaging.
Because cybersecurity threats continue to evolve, thereby increasing inherent risk, the Company’s Corporate Information Security team is augmented by contracted external managed security service providers, who collectively work 24/7 to monitor cybersecurity threats through processes such as endpoint and network security, email protection, data loss prevention, vulnerability scanning and mitigation, identity and access management, logging and monitoring, and threat hunting.
Semi-annual cybersecurity maturity assessments are conducted by the Company’s Corporate Information Security team on its information systems using industry-standard guidelines and tools, including the National Institute of Standards Cybersecurity Framework, the Federal Financial Institutions Examination Council Cybersecurity Assessment Tool, and the Center for Internet Security Critical Security Controls. 34 Table of Contents Because cybersecurity threats continue to evolve, thereby increasing inherent risk, the Company’s Corporate Information Security team is augmented by contracted external managed security service providers, who collectively work 24/7 to monitor cybersecurity threats through processes such as endpoint and network security, email protection, data loss prevention, vulnerability scanning and mitigation, identity and access management, logging and monitoring, and threat hunting.
Independent third parties test the Company’s cyber capabilities and audit its cloud security. The Company regularly tests its systems to discover and address any potential vulnerabilities.
Independent third parties test the Company’s cyber capabilities and audit its cloud security. The Company regularly tests its systems to discover and address any potential vulnerabilities. Senior and Executive management also participate in cybersecurity industry collaboration and information-sharing forums and utilize the information gained to drive protective and detective cybersecurity strategies and tactics.
Our CISO has over 25 years of financial services industry experience, with varying positions in information technology, security, and risk management. She has numerous industry certifications, including Certified Information Systems Security Professional and Certified in Risk and Information Systems Controls certifications.
The Cyber and Information Security Risk Management Program and Technology Risk Management Program are managed by the Company’s Corporate Information Security team, led by the CISO and the CIO. Our CISO has over 25 years of financial services industry experience, with varying positions in information technology, security, and risk management.
Our CIO has deep expertise across the financial services industry and in leading organizations through change. He is a member of the CNBC Technology Executive Council, where he contributes to ongoing discussions and insights on the latest trends and challenges in technology.
He is a member of the CNBC Technology Executive Council, where he contributes to ongoing discussions and insights on the latest trends and challenges in technology. In addition, he is a member of the Wall Street Journal CIO Network, a collective community of leading technology experts from the world’s most influential companies.
She is a member of ISACA’s global Governance of Enterprise Information & Technology Advisory Group and Securing AI Certification Working Group. Our CIO has over 25 years of relevant experience in large scale digital transformation, strategic planning, talent development, global technology delivery, and operational experience.
Our CIO has over 25 years of relevant experience in large scale digital transformation, strategic planning, talent development, global technology delivery, and operational experience. Our CIO has deep expertise across the financial services industry and in leading organizations through change.
Senior and Executive management also participate in cybersecurity industry collaboration and information-sharing forums and utilize the information gained to drive protective and detective cybersecurity strategies and tactics. 27 Table of Contents The Company requires information security education, training at the time of hire, and annually thereafter, by its employees (including contractors and other third parties for training purposes), designed to mitigate accidental information security incidents.
The Company requires information security education, training at the time of hire, and annually thereafter, by its employees (including contractors and other third parties for training purposes), designed to mitigate accidental information security incidents. Phishing simulation activities are regularly conducted to assess employees’ competency at identifying potential threats.
The Cyber and Information Security Risk Management Program and Technology Risk Management Program align with the Company’s Third-Party Risk Management Program in regard to protecting information assets. The Cyber and Information Security Risk Management Program and Technology Risk Management Program are managed by the Company’s Corporate Information Security team, led by the CISO and the CIO.
The Cyber and Information Security Risk Management Program and Technology Risk Management Program align with the Company’s Third-Party Risk Management Program in regard to protecting information assets. Internal Audit (Third Line) also performs periodic audits of these risk management programs in accordance with their internal audit plan, which is approved by the Audit Committee of the Board.
Removed
In addition, he is a member of the Wall Street Journal CIO Network, a collective community of leading technology experts from the world’s most influential companies. Both our CISO and CIO also participate in various financial services industry committees and cybersecurity advisory boards.
Added
She has numerous industry certifications, including Certified Information Systems Security Professional and Certified in Risk and Information Systems Controls certifications. She is a board of directors member with the Cyber Risk Institute, and a member of ISACA’s global Emerging Trends Working Group and Securing AI Certification Working Group.
Removed
Semi-annual cybersecurity maturity assessments are conducted by the Company’s Corporate Information Security team on its information systems using industry-standard guidelines and tools, including the National Institute of Standards Cybersecurity Framework, the Federal Financial Institutions Examination Council Cybersecurity Assessment Tool, and the Center for Internet Security Critical Security Controls.
Removed
Phishing simulation activities are regularly conducted to assess employees’ competency at identifying potential threats. Employees are assigned incremental training requirements should they fail to identify simulated phishing emails through the initial training.
Removed
Employees, contractors, and third parties are required to immediately report any suspected cybersecurity threats to the Corporate Information Security team for triaging.

Item 2. Properties

Properties — owned and leased real estate

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Consumer Banking operates a distribution network that consists of 196 banking centers: Location Leased Owned Total Connecticut 61 34 95 Massachusetts 9 9 18 Rhode Island 4 3 7 New York 37 39 76 Total 111 85 196 Additional information regarding the Company’s owned facilities and leased locations can be found within Note 6: Premises and Equipment and Note 7: Leasing, respectively, in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
Consumer Banking operates a distribution network that consists of 195 banking centers: Location Leased Owned Total Connecticut 61 34 95 Massachusetts 8 9 17 Rhode Island 4 3 7 New York 37 39 76 Total 110 85 195 Additional information regarding the Company’s owned facilities and leased locations can be found within Note 5: Premises and Equipment and Note 6: Leasing, respectively, in the Notes to Consolidated Financial Statements contained in Part II - Item 8.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS Information regarding legal proceedings can be found within Note 23: Commitments and Contingencies in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 Table of Contents PART II
ITEM 3. LEGAL PROCEEDINGS Information regarding legal proceedings can be found within Note 22: Commitments and Contingencies in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 36 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures 29 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 62 Item 8.
Item 4. Mine Safety Disclosures 36 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. [Reserved] 38 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 70 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Information regarding dividend restrictions can be found under the section captioned “Supervision and Regulation” in Part I - Item 1. Business and within Note 14: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data, which are incorporated herein by reference.
Information regarding dividend restrictions can be found under the section captioned “Supervision and Regulation” in Part I - Item 1. Business and within Note 13: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data, which are incorporated herein by reference.
(2) The average price paid per share is calculated on a trade date basis and excludes commissions and other transaction costs.
(2) The average price paid per share is calculated on a trade date basis and includes commissions and other transaction costs.
Recent Sales of Unregistered Securities There were no unregistered securities sold by the Company during the year ended December 31, 2024.
Recent Sales of Unregistered Securities There were no unregistered securities sold by the Company during the year ended December 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock is traded on the NYSE under the symbol WBS. At February 28, 2025, there were 7,944 holders of record, as determined by Broadridge Corporate Issuer Solutions, Inc., the Company’s transfer agent.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock is traded on the NYSE under the symbol WBS. At February 20, 2026, there were 7,551 holders of record, as determined by Broadridge Corporate Issuer Solutions, Inc., the Company’s transfer agent.
(3) The Company maintains a common stock repurchase program, which was approved by the Board of Directors on October 24, 2017, that authorizes management to purchase shares of Webster common stock in open market or privately negotiated transactions, through block trades, and pursuant to any adopted predetermined trading plan, subject to the availability and trading price of stock, general market conditions, alternative uses for capital, regulatory considerations, and the Company’s financial performance.
(3) The Company maintains a common stock repurchase program, which was approved by the Board on October 24, 2017, that permits management to repurchase shares of Webster common stock in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC, subject to the availability and trading price of stock, general market conditions, alternative uses for capital, regulatory considerations, and the Company’s financial performance.
Issuer Purchases of Equity Securities The following table provides information with respect to any purchase of the Company’s common stock made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount Available for Purchase Under the Plans or Programs (3) October 1, 2024 - October 31, 2024 1,585 $ 45.92 — $ 227,952,190 November 1, 2024 - November 30, 2024 815 60.64 — 227,952,190 December 1, 2024 - December 31, 2024 3,399 59.16 — 227,952,190 Total 5,799 55.75 — 227,952,190 (1) All 5,799 of the shares purchased during the three months ended December 31, 2024, were acquired outside of the Company’s common stock repurchase program at market prices and related to employee share-based compensation plan activity.
Issuer Purchases of Equity Securities The following table provides information with respect to any purchase of the Company’s common stock made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, during the three months ended December 31, 2025: Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount Available for Purchase Under the Plans or Programs (3) October 1, 2025 - October 31, 2025 2,868,577 $ 56.50 2,866,010 $ 376,627,388 November 1, 2025 - November 30, 2025 746,871 56.70 746,580 334,298,182 December 1, 2025 - December 31, 2025 — — — 334,298,182 Total 3,615,448 56.54 3,612,590 334,298,182 (1) During the three months ended December 31, 2025, 2,858 of the total number of shares purchased were acquired at market prices outside of the Company’s common stock repurchase program and related to employee stock-based compensation plan activity.
This existing repurchase program will remain in effect until fully utilized or until modified, superseded, or terminated. 30 Table of Contents Performance Graph The performance graph compares the yearly percentage change in the Company ’ s cumulative total stockholder return on its common stock over the last five years to the cumulative total return of (i) the Standard & Poor’s 500 Index (S&P 500 Index) and (ii) the Keefe, Bruyette & Woods Regional Banking Index (KRX Index), assuming the reinvestment of dividends and an initial investment of $100 on December 31, 2019.
Financial Statements and Supplementary Data. 37 Table of Contents Performance Graph The performance graph compares the yearly percentage change in the Company ’ s cumulative total stockholder return on its common stock over the last five years to the cumulative total return of (i) the Standard & Poor’s 500 Index (“S&P 500 Index”) and (ii) the Keefe, Bruyette & Woods Regional Banking Index (“KRX Index”), assuming the reinvestment of dividends and an initial investment of $100 on December 31, 2020.
On April 27, 2022, the Board of Directors increased the Company’s authority to repurchase shares of Webster common stock under the repurchase program by $600.0 million in shares.
On April 30, 2025, the Board increased the Company’s authority to repurchase shares of Webster common stock under the repurchase program by $700.0 million. In accordance with the Transaction Agreement with Banco Santander, the Company paused repurchases under its stock repurchase program through the completion of the Transaction.
Period Ending December 31, 2019 2020 2021 2022 2023 2024 Webster Financial Corporation $ 100 $ 83 $ 113 $ 99 $ 110 $ 124 KRX Index $ 100 $ 91 $ 125 $ 116 $ 116 $ 131 S&P 500 Index $ 100 $ 118 $ 152 $ 125 $ 157 $ 197
Period Ending December 31, 2020 2021 2022 2023 2024 2025 Webster Financial Corporation $ 100 $ 137 $ 120 $ 133 $ 150 $ 176 KRX Index $ 100 $ 137 $ 127 $ 127 $ 143 $ 153 S&P 500 Index $ 100 $ 129 $ 105 $ 133 $ 166 $ 196
Added
Additional information regarding the proposed Transaction with Banco Santander can be found within the sections captioned “Proposed Transaction with Banco Santander” in both Part I - Item 1. Business and Part II - Item 7.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 24: Subsequent Events in the Notes to Consolidated Financial Statements contained in Part II - Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

177 edited+41 added−69 removed72 unchanged
Qualitative adjustments are based on management’s judgment of the Company, market, industry, or business specific data, may be applied in relation to economic forecasts when relevant facts and circumstances are expected to impact credit losses, particularly in times of significant volatility in economic activity.
Qualitative adjustments are based on management’s judgment of the Company, market, industry, or business specific data, and may be applied in relation to economic forecasts when relevant facts and circumstances are expected to impact credit losses, particularly in times of significant volatility in economic activity.
Various interest rate contracts, including futures, options, swaps, caps, and floors, can be used to manage interest rate risk. These contracts involve, to varying degrees, levels of credit and interest rate risk.
Various interest rate contracts, including futures, options, swaps, caps, and floors, can be used to manage interest rate risk. These contracts involve, to varying degrees, levels of credit risk and interest rate risk.
Under these frameworks, expected credit losses are calculated as the product of the probability of a loan defaulting, expected loss given the occurrence of a default, and the expected exposure of a loan at default. Summing the product across loans over their lives yields the lifetime expected credit losses for a given portfolio.
Under these frameworks, expected credit losses are calculated as the product of the probability of a loan defaulting, expected loss rate given the occurrence of a default, and the expected exposure of a loan at default. Summing the product across loans over their lives yields the lifetime expected credit losses for a given portfolio.
Management has identified that the Company’s most critical accounting estimates are those related to the ACL on loans and leases and business combinations accounting policies. These accounting policies and their underlying estimates are discussed directly with the Audit Committee of the Board of Directors.
Management has identified that the Company’s most critical accounting estimates are those related to the ACL on loans and leases and business combinations accounting policies. These accounting policies and their underlying estimates are discussed directly with the Audit Committee of the Board.
Management continues to monitor interest rates and other relevant factors given recent market volatility and is prepared to take additional action, as necessary. 61 Table of Contents Critical Accounting Estimates The preparation of the Company’s Consolidated Financial Statements, and accompanying notes thereto, in accordance with GAAP and practices generally applicable to the financial services industry, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities.
Management continues to monitor interest rates and other relevant factors given recent market volatility and is prepared to take additional action, as necessary. 68 Table of Contents Critical Accounting Estimates The preparation of the Company’s Consolidated Financial Statements, and accompanying notes thereto, in accordance with GAAP and practices generally applicable to the financial services industry, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities.
Holding Company Liquidity. The primary source of liquidity at the Holding Company is dividends from the Bank. To a lesser extent, investment income, net proceeds from investment sales, borrowings, and public offerings may provide additional liquidity.
The primary source of liquidity at the Company is dividends from the Bank. To a lesser extent, investment income, net proceeds from investment sales, borrowings, and public offerings may provide additional liquidity.
The measurement method used to calculate the expected credit loss on an individually assessed loan or lease is dependent on the type and whether the loan or lease is considered to be collateral dependent.
The measurement method used to calculate the expected credit loss on an individually assessed loan or lease depends on the type and whether the loan or lease is considered to be collateral dependent.
The Company calculates its LTV ratios primarily using appraisals at origination unless a full appraisal is subsequently required based on deal-specific events. Given the foundational change in office demand driven by the acceptance of remote work options, the commercial real estate market has continued to experience an increase in office property vacancies.
The Company calculates its LTV ratios primarily using appraisals at origination unless a full appraisal is subsequently required based on deal-specific events. Given the ongoing change in office demand driven by the acceptance of remote work options, the commercial real estate market has continued to experience an increase in office property vacancies.
The following table summarizes significant fixed and determinable contractual obligations at December 31, 2024. The actual timing and amounts of future cash payments may differ from the amounts presented. Based on the Company’s current liquidity position, it is expected that our sources of funds will be sufficient to fulfill these obligations when they come due.
The following table summarizes significant fixed and determinable contractual obligations at December 31, 2025. The actual timing and amounts of future cash payments may differ from the amounts presented. Based on the Company’s current liquidity position, it is expected that our sources of funds will be sufficient to fulfill these obligations when they come due.
To assist with this process, management inspects reports generated by the Company’s loan reporting systems related to loan production, loan quality, concentrations of credit, loan delinquencies, non-performing loans, and potential problem loans. Commercial non-mortgage, asset-based, and equipment finance loans are underwritten after evaluating and understanding the borrower’s ability to operate and service its debt.
To assist with this process, management reviews reports generated by the Company’s loan reporting systems related to loan production, loan quality, concentrations of credit, loan delinquencies, non-performing loans, and potential problem loans. Commercial non-mortgage, asset-based, and equipment finance loans are underwritten after evaluating and understanding the borrower’s ability to operate and service its debt.
(2) Available-for-sale securities are presented at fair value and held-to-maturity securities are presented at amortized cost before any allowance for credit losses. Additional information regarding the Company’s investment securities’ portfolios can be found within Note 3: Investment Securities in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
(2) Available-for-sale securities and held-to-maturity securities are presented at amortized cost before any allowance for credit losses. Additional information regarding the Company’s investment securities’ portfolios can be found within Note 3: Investment Securities in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
The following table presents the minimum ratios required as of December 31, 2024, and 2023: Adequately Capitalized Well Capitalized CET1 Risk-Based Capital 4.5 % 6.5 % Tier 1 Risk-Based Capital 6.0 8.0 Total Risk-Based Capital 8.0 10.0 Tier 1 Leverage Capital 4.0 5.0 At December 31, 2024, and 2023, both the Company and the Bank were classified as “well-capitalized.” Management believes that no events or changes have occurred subsequent to year-end and through the date of this Annual Report on Form 10-K that would change this designation.
The following table presents the minimum ratios required as of December 31, 2025, and 2024: Adequately Capitalized Well Capitalized CET1 Risk-Based Capital 4.5 % 6.5 % Tier 1 Risk-Based Capital 6.0 8.0 Total Risk-Based Capital 8.0 10.0 Tier 1 Leverage Ratio 4.0 5.0 At December 31, 2025, and 2024, both the Company and the Bank were classified as “well-capitalized.” Management believes that no events or changes have occurred subsequent to year-end and through the date of this Annual Report on Form 10-K that would change this designation.
An activity-based capital stock investment in the FHLB is required in order for the Bank to maintain its membership and access advances and other extensions of credit for sources of funds and liquidity purposes. The FHLB capital stock investment is restricted as there is no market for it, and it can only be redeemed by the FHLB.
An activity-based capital stock investment in a FHLB is required in order for the Bank to maintain its membership and access advances and other extensions of credit for sources of funds and liquidity purposes. The FHLB capital stock investment is restricted as there is no market for it, and it can only be redeemed by the applicable FHLB.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis provides information that management believes is necessary to understand the Company ’ s consolidated financial condition, results of operations, and cash flows for the year ended December 31, 2024, as compared to 2023.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis provides information that management believes is necessary to understand the Company ’ s consolidated financial condition, results of operations, and cash flows for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
Essentially, interest rates are assumed to change up or down in a parallel fashion, and the net interest income results in each scenario are compared to a flat rate base scenario. The flat rate base scenario holds the end of period yield curve constant over a twelve-month forecast horizon.
Essentially, interest rates are assumed to change up or down in a parallel fashion, and the net interest income results in each scenario are compared to a flat rate base scenario. The flat rate base scenario holds the end of period yield curve constant over a 12-month forecast horizon.
While the Company does anticipate ongoing change in the traditional office sector, management believes that its reserve levels reflect the expected credit losses in the portfolio. 49 Table of Contents Credit Policies and Procedures The Bank has credit policies and procedures in place designed to support its lending activities within an acceptable level of risk, which are reviewed and approved by management and the Board of Directors on a regular basis.
While the Company does anticipate ongoing change in the traditional office sector, management believes that its reserve levels reflect the expected credit losses in the portfolio. 55 Table of Contents Credit Policies and Procedures The Bank has credit policies and procedures in place designed to support its lending activities within an acceptable level of risk, which are reviewed and approved by management and the Board on a regular basis.
Qualitative factors used in the Company’s models for all loan and lease portfolios include, but are not limited to, nature and volume of portfolio growth, credit quality trends, underwriting exception levels, quality of internal loan review, credit concentrations, and staffing trends.
Qualitative factors that are generally used in the Company’s models for all loan and lease portfolios include, but are not limited to, nature and volume of portfolio growth, credit quality trends, underwriting exception levels, quality of internal loan review, credit concentrations, and staffing trends.
The Company was not required to contribute to the defined benefit pension plan in 2024, nor does it currently anticipate that it will be required to contribute in 2025. The Company’s non-qualified supplemental executive retirement plans and other post-employment benefit plans are unfunded.
The Company was not required to contribute to the defined benefit pension plan in 2025, nor does it currently anticipate that it will be required to contribute in 2026. The Company’s non-qualified supplemental executive retirement plans and other post-employment benefit plans are unfunded.
The adequacy of liquidity, as assessed by the OCC, depends on factors such as overall asset and liability structure, market conditions, competition, and the nature of the institution’s deposit and loan customers. At December 31, 2024, the Bank exceeded all regulatory liquidity requirements.
The adequacy of liquidity, as assessed by the OCC, depends on factors such as overall asset and liability structure, market conditions, competition, and the nature of the institution’s deposit and loan customers. At December 31, 2025, the Bank exceeded all regulatory liquidity requirements.
Financial Statements and Supplementary Data. 56 Table of Contents Federal Home Loan Bank and Federal Reserve Bank Stock. The Bank is a member of the FHLB System, which consists of 11 district FHLBs, each of which is subject to the supervision and regulation of the Federal Housing Finance Agency.
Financial Statements and Supplementary Data. 63 Table of Contents Federal Home Loan Bank and Federal Reserve Bank Stock. The Bank is a member of the FHLB System, which consists of 11 district FHLBs, each of which is subject to the supervision and regulation of the Federal Housing Finance Agency.
As market rates rise, however, the interest rate paid on these loans does not rise until the fully indexed rate rises through the contractual floor. On the liability side, there is a large concentration of customers with indeterminate maturity deposits who have options to add or withdraw funds from their accounts at any time.
As market rates rise, however, the interest rate paid on these loans does not rise until the fully indexed rate rises through the contractual floor. 66 Table of Contents On the liability side, there is a large concentration of customers with indeterminate maturity deposits who have options to add or withdraw funds from their accounts at any time.
The remaining 50% is subject to call when deemed necessary by the Federal Reserve System. Similar to FHLB stock, the FRB capital stock investment is restricted as there is no market for it, and it can only be redeemed by the FRB.
The remaining 50% is subject to call when deemed necessary by the Federal Reserve. Similar to FHLB stock, the FRB capital stock investment is restricted as there is no market for it, and it can only be redeemed by the applicable FRB.
The Company is committed to maintaining a strong base of core deposits, which consist of demand, interest-bearing checking, savings, health savings, and money market accounts, to support growth in its loan portfolios. Management actively monitors the interest rate environment and makes adjustments to its deposit strategy in response to evolving market conditions, funding needs, and client relationship dynamics.
The Company is committed to maintaining a strong base of core deposits, which consists of demand, health savings, interest-bearing checking, money market, and savings accounts, to support growth in its loan portfolios. Management actively monitors the interest rate environment and makes adjustments to its deposit strategy in response to evolving market conditions, funding needs, and client relationship dynamics. Company Liquidity.
Additional information regarding the Company’s reportable segments and its segment reporting methodology can be found within Note 21: Segment Reporting in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
Additional information regarding the Company’s reportable segments and its segment reporting methodology can be found within Note 20: Segment Reporting in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
On an annual basis, appraisal assumptions and other factors are internally reviewed to determine whether an incremental third-party appraisal is warranted. New appraisals are obtained sooner if a loan becomes adversely classified, substandard, or non-accrual. Consumer loans are subject to policies and procedures developed to manage the specific risk characteristics of the portfolio.
On an annual basis, appraisal assumptions and other factors are internally reviewed to determine whether an incremental third-party appraisal is warranted. New appraisals are typically obtained sooner if a loan becomes substandard or non-accrual. Consumer loans are subject to policies and procedures developed to manage the specific risk characteristics of the portfolio.
Methods for collateral dependent commercial loans are either based on the fair value of the collateral less estimated cost to sell when the basis of repayment is the sale of collateral, or the present value of the expected cash flows from the operation of the collateral.
Methods for collateral dependent commercial loans are either based on the fair value of the collateral less estimated costs to sell when the basis of repayment is the sale of collateral, or the present value of the expected cash flows from the operation of the collateral.
Limits for earnings at risk are set for parallel ramps in interest rates over a twelve-month period of up and down 100, 200, and 300 basis points, and for interest rate curve twist shocks of up and down 50 and 100 basis points.
Limits for earnings at risk are set for parallel ramps in interest rates over a 12-month period of up and down 100, 200, and 300 basis points, and for interest rate curve twist shocks of up and down 50 and 100 basis points.
As of the date of this Annual Report on Form 10-K, the Company’s uninsured deposits as a percentage of total deposits, adjusted for affiliate deposits and collateralized deposits, is consistent with the percentage reported at December 31, 2024.
As of the date of this Annual Report on Form 10-K, the Company’s uninsured deposits as a percentage of total deposits, adjusted for affiliate deposits and collateralized deposits, is consistent with the percentage reported at December 31, 2025.
In addition, the OCC may further establish individual limits on certain types of investments if the concentration in such security presents a safety and soundness concern. Although the Bank held the entirety of the Company’s investment securities portfolio at both December 31, 2024, and 2023, the Holding Company may also directly hold investments.
In addition, the OCC may further establish individual limits on certain types of investments if the concentration in such security presents a safety and soundness concern. Although the Bank held the entirety of the Company’s investment securities portfolio at both December 31, 2025, and 2024, the Company may also directly hold investments.
There are certain restrictions on the Bank’s payment of dividends to the Holding Company, which can be found within the section captioned “Supervision and Regulation” in Part I - Item 1. Business, and within Note 14: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
There are certain restrictions on the Bank’s payment of dividends to the Company, which can be found within the section captioned “Supervision and Regulation” in Part I - Item 1. Business, and within Note 13: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
In connection with the completion of a multi-family securitization during the third quarter of 2024, the Company assumed an obligation to reimburse, or guarantee, losses incurred by the multi-family securitization trusts of up to 12% of the aggregate UPB of the loans at the time of sale. Essentially, this obligation represents a first credit loss enhancement provided by the Company.
In connection with the completion of a multi-family securitization in 2024, the Company assumed an obligation to reimburse, or guarantee, losses incurred by the multi-family securitization trusts of up to 12% of the aggregate UPB of the loans at the time of sale. Essentially, this obligation represents a first credit loss enhancement provided by the Company.
Additional information regarding derivatives can be found within Note 17: Derivative Financial Instruments in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
Additional information regarding derivatives can be found within Note 16: Derivative Financial Instruments in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
Based on its estimates, management believes it is more likely than not that the Company will realize its DTAs, net of the valuation allowance, at December 31, 2024.
Based on its estimates, management believes it is more likely than not that the Company will realize its DTAs, net of the valuation allowance, at December 31, 2025.
The most recent FRB semi-annual cash dividend in 2024 was paid on December 31, 2024, in an amount equal to an annual yield of 4.24%. Uses of Funds. The Company enters into various contractual obligations in the normal course of business that require future cash payments and that could impact its short-term and long-term liquidity and capital resource needs.
The most recent FRB semi-annual cash dividend in 2025 was paid on December 31, 2025, in an amount equal to an annual yield of 4.18%. Uses of Funds. The Company enters into various contractual obligations in the normal course of business that require future cash payments and that could impact its short-term and long-term liquidity and capital resource needs.
The following tables summarize the percentage composition of commercial real estate and multi-family loans by both geography and property type, and whether the properties are owner occupied or non-owner occupied: At December 31, 2024 2023 Geography: Owner Occupied Non-Owner Occupied Total Owner Occupied Non-Owner Occupied Total New York City 2.9 % 32.6 % 35.5 % 2.0 % 33.4 % 35.4 % Other New York Counties 2.6 11.7 14.3 2.3 13.4 15.7 Connecticut 2.4 6.3 8.7 2.2 6.1 8.3 New Jersey 1.6 6.9 8.5 0.7 7.5 8.2 Massachusetts 1.4 4.9 6.3 1.3 5.0 6.3 Southeast 1.0 10.2 11.2 0.7 10.3 11.0 Other 1.4 14.1 15.5 1.0 14.1 15.1 Total Commercial real estate & Multi-family 13.3 % 86.7 % 100.0 % 10.2 % 89.8 % 100.0 % At December 31, 2024 2023 Property Type: Owner Occupied Non-Owner Occupied Total Owner Occupied Non-Owner Occupied Total Multi-family 0.4 % 34.3 % 34.7 % 0.4 % 35.3 % 35.7 % Industrial & Warehouse 3.1 14.6 17.7 2.8 13.6 16.4 Retail 0.5 8.1 8.6 0.5 7.9 8.4 Construction 0.1 7.7 7.8 0.2 6.7 6.9 Healthcare & Senior Living 4.3 1.9 6.2 1.8 5.6 7.4 Medical Office 0.1 4.2 4.3 0.1 3.1 3.2 Traditional Office — 3.8 3.8 — 4.9 4.9 Hotel — 2.1 2.1 — 2.3 2.3 Other 4.8 10.0 14.8 4.4 10.4 14.8 Total Commercial real estate & Multi-family 13.3 % 86.7 % 100.0 % 10.2 % 89.8 % 100.0 % The weighted-average LTV ratio for non-owner occupied commercial real estate and multi-family loans at December 31, 2024, and 2023, was 57% and 56%, respectively.
The following tables summarize the percentage composition of commercial real estate and multi-family loans by both geography and property type, and whether the properties are owner occupied or non-owner occupied: December 31, 2025 2024 Geography: Owner Occupied Non-Owner Occupied Total Owner Occupied Non-Owner Occupied Total New York City 2.6 % 31.0 % 33.6 % 2.9 % 32.6 % 35.5 % Other New York Counties 3.0 10.7 13.7 2.6 11.7 14.3 Connecticut 2.0 7.1 9.1 2.4 6.3 8.7 New Jersey 1.0 6.3 7.3 1.6 6.9 8.5 Massachusetts 1.0 4.5 5.5 1.4 4.9 6.3 Southeast 0.9 12.0 12.9 1.0 10.2 11.2 Other 1.1 16.8 17.9 1.4 14.1 15.5 Total Commercial real estate & Multi-family 11.6 % 88.4 % 100.0 % 13.3 % 86.7 % 100.0 % December 31, 2025 2024 Property Type: Owner Occupied Non-Owner Occupied Total Owner Occupied Non-Owner Occupied Total Multi-family 0.2 % 34.5 % 34.7 % 0.4 % 34.3 % 34.7 % Industrial & Warehouse 3.3 17.3 20.6 3.1 14.6 17.7 Retail 0.5 9.0 9.5 0.5 8.1 8.6 Construction — 5.1 5.1 0.1 7.7 7.8 Medical Office 0.1 4.8 4.9 0.1 4.2 4.3 Healthcare & Senior Living 2.3 2.3 4.6 4.3 1.9 6.2 Traditional Office — 3.6 3.6 — 3.8 3.8 Hotel — 2.1 2.1 — 2.1 2.1 Other 5.2 9.7 14.9 4.8 10.0 14.8 Total Commercial real estate & Multi-family 11.6 % 88.4 % 100.0 % 13.3 % 86.7 % 100.0 % The weighted-average LTV ratio for non-owner occupied commercial real estate and multi-family loans at both December 31, 2025, and 2024 , was 57%.
This information should be read in conjunction with the Company ’ s Consolidated Financial Statements, and the accompanying Notes thereto, contained in Part II - Item 8. Financial Statements and Supplementary Data, as well as other information set forth throughout this report.
This information should be read in conjunction with the Consolidated Financial Statements, and the accompanying Notes thereto, contained in Part II - Item 8. Financial Statements and Supplementary Data, as well as other information set forth throughout this report.
Management believes that the Company’s interest rate risk position at December 31, 2024, represents a reasonable level of risk given the current interest rate outlook.
Management believes that the Company’s interest rate risk position at December 31, 2025, represents a reasonable level of risk given the current interest rate outlook.
Each of the Company’s other available-for-sale securities in an unrealized loss position at December 31, 2024, are investment grade, current as to principal and interest, and their price changes are consistent with interest and credit spreads when adjusting for duration, convexity, rating, and industry differences.
Each of the Company’s available-for-sale securities in an unrealized loss position at December 31, 2025, is investment grade, current as to principal and interest, and their price changes are consistent with interest and credit spreads when adjusting for duration, convexity, rating, and industry differences.
Additional information regarding the Company’s ACL methodology can be found within Note 1: Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
Additional information regarding the Company’s ACL methodology can be found within Note 1: Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
The Holding Company generally uses its funds for principal and interest payments on senior notes, subordinated notes, and junior subordinated debt, dividend payments to preferred and common stockholders, repurchases of its common stock, and purchases of investment securities, as applicable.
The Company generally uses its funds for principal and interest payments on senior notes, subordinated notes, and junior subordinated debt, dividend payments to preferred and common stockholders, repurchases of its common stock, and purchases of debt and equity securities, as applicable.
Additional information regarding the required regulatory capital levels and ratios applicable to the Company and the Bank can be found within Note 14: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data. 54 Table of Contents Sources and Uses of Funds Sources of Funds.
Additional information regarding the required regulatory capital levels and ratios applicable to the Company and the Bank can be found within Note 13: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data. 61 Table of Contents Sources and Uses of Funds Sources of Funds.
The earnings at risk simulation analysis incorporates assumptions about balance sheet changes (i.e., product mix, growth, and loan and deposit pricing). Overall, it is a measure of short-term interest rate risk. At December 31, 2024, and 2023, the flat rate base scenario assumed a federal funds rate of 4.50% and 5.50%, respectively.
The earnings at risk simulation analysis incorporates assumptions about balance sheet changes (i.e., product mix, growth, and loan and deposit pricing). Overall, it is a measure of short-term interest rate risk. At December 31, 2025, and 2024, the flat rate base scenario assumed a federal funds rate of 3.75% and 4.50%, respectively.
At December 31, 2024, and 2023, the Company’s valuation allowance on its DTAs was $64.4 million and $28.7 million, respectively, of which $62.7 million and $28.7 million, respectively, were related to the portion of SALT net operating loss and credit carryforwards that, in management’s judgment, are not more likely than not to be realized.
At December 31, 2025, and 2024, the Company’s valuation allowance on its DTAs was $56.8 million and $64.4 million, respectively, of which $56.8 million and $62.7 million, respectively, were related to the portion of SALT net operating loss and credit carryforwards that, in management’s judgment, are not more likely than not to be realized.
The change in total liabilities was attributed to the following: • Total deposits increased $4.0 billion, reflecting a $4.4 billion increase in interest-bearing deposits, partially offset by a $0.4 billion decrease in non-interest-bearing deposits.
The change in total liabilities was primarily attributed to the following items: • Total deposits increased $4.0 billion, reflecting a $4.2 billion increase in interest-bearing deposits, partially offset by a $0.2 billion decrease in non-interest-bearing deposits.
Financial Statements and Supplementary Data. Borrowings. The Bank’s primary borrowing sources include securities sold under agreements to repurchase, federal funds purchased, FHLB advances, and long-term debt. Total borrowings were $3.4 billion and $3.9 billion at December 31, 2024, and 2023, respectively, and represented 4.3% and 5.2% of total assets, respectively.
Financial Statements and Supplementary Data. Borrowings. The Bank’s primary borrowing sources include securities sold under agreements to repurchase, federal funds purchased, FHLB advances, and long-term debt. Total borrowings were $4.3 billion and $3.4 billion at December 31, 2025, and 2024, respectively, and represented 5.1% and 4.3% of total assets, respectively.
The Company also enters into commitments to invest in venture capital and private equity funds and tax credit structures to assist the Bank in meeting its responsibilities under the CRA. The total unfunded commitment for these alternative investments was $837.2 million at December 31, 2024.
The Company enters into commitments to invest in venture capital and private equity funds and tax credit structures to assist the Bank in meeting its responsibilities under the CRA. The total unfunded commitment for these alternative investments was $764.2 million at December 31, 2025.
The federal funds rate target range was 4.25-4.50% at December 31, 2024, and 5.25-5.50% at December 31, 2023. Equity at risk is defined as the change in the net economic value of financial assets and financial liabilities due to changes in interest rates compared to a base net economic value.
The federal funds rate target range was 3.50-3.75% at December 31, 2025, and 4.25-4.50% at December 31, 2024. Equity at risk is defined as the change in the net economic value of financial assets and financial liabilities due to changes in interest rates compared to a base net economic value.
At December 31, 2024, and 2023, commercial non-mortgage, commercial real estate, and multi-family loans comprised 75.1% and 75.0%, respectively, of the Company’s loan and lease portfolio, with a large portion of the borrowers or properties associated with these loans geographically concentrated in New York City and the proximate areas. 48 Table of Contents The following table summarizes the percentage composition of commercial non-mortgage loans by industry, as determined using NAICS codes, which are used by the Company to categorize loans based on the borrower’s type of business: At December 31, 2024 2023 Finance 25.7 % 24.4 % Services 16.1 17.3 Public Administration 15.8 14.0 Communications 7.7 6.9 Manufacturing 6.4 6.9 Real Estate 5.0 4.8 Retail & Wholesale 4.6 5.2 Healthcare 4.6 5.0 Transportation & Public Utilities 3.0 3.3 Construction 2.3 2.8 Other 8.8 9.4 Total Commercial non-mortgage 100.0 % 100.0 % As illustrated above, concentrations are generally consistent from period to period.
At both December 31, 2025, and 2024, commercial non-mortgage, commercial real estate, and multi-family loans comprised approximately 75% of the Company’s loan and lease portfolio, with a large portion of the borrowers or properties associated with these loans geographically concentrated in New York City and the proximate areas. 54 Table of Contents The following table summarizes the percentage composition of commercial non-mortgage loans by industry, as determined using NAICS codes, which are used by the Company to categorize loans based on the borrower’s type of business: December 31, Industry: 2025 2024 Finance 30.0 % 25.7 % Public Administration 16.4 15.8 Services 15.7 16.1 Communications 7.0 7.7 Manufacturing 5.7 6.4 Real Estate 5.6 5.0 Retail & Wholesale 4.1 4.6 Transportation & Public Utilities 3.3 3.0 Healthcare 3.0 4.6 Construction 2.0 2.3 Other 7.2 8.8 Total Commercial non-mortgage 100.0 % 100.0 % As illustrated above, concentrations generally remain consistent from period to period.
The Company calculates its uninsured deposit balances based on the methodologies and assumptions used for regulatory reporting requirements, which includes an estimated portion and affiliate deposits. At December 31, 2024, and 2023, total uninsured deposits as per regulatory reporting requirements and reported on Schedule RC-O of the Bank’s Call Report were $22.6 billion and $21.0 billion, respectively.
The Company calculates its uninsured deposit balances based on the methodologies and assumptions used for regulatory reporting requirements, which includes an estimated portion and affiliate deposits. At December 31, 2025, and 2024, total uninsured deposits as per regulatory reporting requirements and reported on Schedule RC-O of the Bank’s Call Report were $23.8 billion and $22.6 billion, respectively.
Tangible book value per common share represents stockholders’ equity less preferred stock and goodwill and other intangible assets (tangible common equity) divided by common shares outstanding at the end of the reporting period. The tangible common equity ratio represents tangible common equity divided by total assets less goodwill and other intangible assets (tangible assets).
Tangible book value per common share represents stockholders’ equity, less preferred stock and goodwill and other net intangible assets (“tangible common equity”), divided by common shares outstanding at the end of the reporting period. The tangible common equity ratio represents tangible common equity divided by total assets, less goodwill and other net intangible assets (“tangible assets”).
(2) Amounts exclude total accrued interest receivable of $265.0 million. Portfolio Concentrations The Company actively monitors and manages concentrations of credit risk pertaining to specific industries, geographies, property types, and other characteristics that may exist in its loan and lease portfolio.
(2) Amounts due exclude total accrued interest receivable of $282.5 million. Portfolio Concentrations The Company actively monitors and manages concentrations of credit risk pertaining to specific industries, geographies, property types, and other characteristics that may exist in its loan and lease portfolio.
FHLB advances are not only utilized as a source of funding, but also for interest rate risk management purposes. FHLB advances totaled $2.1 billion and $2.4 billion at December 31, 2024, and 2023, respectively. The $0.3 billion decrease is primarily due to a change in short-term funding mix.
FHLB advances are not only utilized as a source of funding, but also for interest rate risk management purposes. FHLB advances totaled $3.0 billion and $2.1 billion at December 31, 2025, and 2024, respectively. The $0.9 billion increase is primarily due to a change in short-term funding mix.
Unencumbered investment securities of $1.0 billion at December 31, 2024, could have been used for collateral on borrowings or to increase borrowing capacity by either $0.8 billion with the FHLB or $0.9 billion with the FRB.
Unencumbered investment securities of $1.0 billion at December 31, 2025, could have been used for collateral on borrowings or to increase borrowing capacity by either $0.8 billion with the FHLB of Boston or $0.9 billion with the FRB of New York.
On January 29, 2025, it was announced that the Holding Company’s Board of Directors had declared a quarterly cash dividend of $0.40 per share on Webster common stock. For the Series F Preferred Stock and Series G Preferred Stock, quarterly cash dividends of $328.125 per share and $16.25 per share were declared, respectively.
On January 28, 2026, it was announced that the Company’s Board had declared a quarterly cash dividend of $0.40 per share on Webster common stock. For the Series F Preferred Stock and Series G Preferred Stock, quarterly cash dividends of $328.125 per share and $16.25 per share, respectively, were declared.
Including time deposits, the Bank had a loan to total deposit ratio of 81.1% and 83.5% at December 31, 2024, and 2023, respectively. The Bank is required by OCC regulations to maintain a sufficient level of liquidity to ensure safe and sound operations.
Including time deposits, the Bank had a loan to total deposit ratio of 82.3% and 81.1% at December 31, 2025, and 2024, respectively. The Bank is required by OCC regulations to maintain a sufficient level of liquidity to ensure safe and sound operations.
The most recent FHLB quarterly cash dividend in 2024 was paid on November 4, 2024, in an amount equal to an annual yield of 8.36%. The Bank is also required to hold FRB stock equal to 6% of its capital and surplus, of which 50% is paid.
The most recent FHLB quarterly cash dividend in 2025 was paid on November 4, 2025, in an amount equal to an annual yield of 7.39%. The Bank is also required to hold FRB stock equal to 6% of its capital and surplus, of which 50% is paid.
The following table summarizes the estimated impact that yield curve twists or immediate non-parallel changes in interest rates of up and down 50 and 100 basis points might have on the Company’s net interest income for the subsequent twelve-month period starting at December 31, 2024, and 2023: Short End of the Yield Curve Long End of the Yield Curve -100bp -50bp +50bp +100bp -100bp -50bp +50bp +100bp December 31, 2024 2.1% 1.0% (0.7)% (1.6)% (2.2)% (1.0)% 1.0% 1.9% December 31, 2023 (1.8)% (0.8)% 0.4% 0.7% (2.3)% (1.1)% 1.1% 2.2% These non-parallel scenarios are modeled with the short end of the yield curve moving up or down 50 and 100 basis points, while the long end of the yield curve remains unchanged, and vice versa.
The following table summarizes the estimated impact that yield curve twists or immediate non-parallel changes in interest rates of up and down 50 and 100 basis points might have on the Company’s net interest income over a 12-month period starting at December 31, 2025, and 2024: Short End of the Yield Curve Long End of the Yield Curve -100bp -50bp +50bp +100bp -100bp -50bp +50bp +100bp December 31, 2025 1.3% 0.6% (0.5)% (1.1)% (2.3)% (1.1)% 1.0% 1.9% December 31, 2024 2.1% 1.0% (0.7)% (1.6)% (2.2)% (1.0)% 1.0% 1.9% These non-parallel scenarios are modeled with the short end of the yield curve moving up or down 50 and 100 basis points, while the long end of the yield curve remains unchanged, and vice versa.
During the three-year transition period, regulatory capital ratios phased out the aggregate amount of the regulatory capital benefit provided from the delayed CECL adoption in the initial two years. For 2023 and 2024, the Company was allowed 50% and 25%, respectively, of the regulatory capital benefit as of December 31, 2021, with full absorption occurring in 2025.
During the three-year transition period, regulatory capital ratios phased out the aggregate amount of the regulatory capital benefit provided from the delayed CECL adoption in the initial two years. For 2024, the Company was allowed 25%, of the regulatory capital benefit as of December 31, 2021. Full absorption occurred in 2025.
Both of these measures are used by management to evaluate the Company’s capital position. The annualized return on average tangible common stockholders’ equity is calculated using net income available to common stockholders, adjusted for the annualized tax-effected amortization of intangible assets, as a percentage of average tangible common equity.
Both of these measures are used by management to evaluate the Company’s capital position. The return on average tangible common stockholders’ equity is calculated using net income less preferred stock dividends, adjusted for the tax-effected amortization of intangible assets, as a percentage of average tangible common equity.
Additional information regarding the Company’s income taxes, including DTAs, can be found within Note 9: Income Taxes in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
Additional information regarding the Company’s income taxes, including its DTAs, can be found within Note 8: Income Taxes in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
The qualitative portion of the collective ACL accounted for approximately 39% and 43% of the total ACL on loans and leases at December 31, 2024, and 2023, respectively.
The qualitative portion of the collective ACL accounted for approximately 22% and 39% of the total ACL on loans and leases at December 31, 2025, and 2024, respectively.
Securities sold under agreements to repurchase are generally a form of short-term funding for the Bank in which it sells securities to counterparties with an agreement to buy them back in the future at a fixed price. Securities sold under agreements to repurchase remained relatively flat at $0.3 billion at both December 31, 2024, and 2023, respectively.
Securities sold under agreements to repurchase are generally a form of short-term funding for the Bank in which it sells securities to counterparties with an agreement to buy them back in the future at a fixed price. Securities sold under agreements to repurchase totaled $0.6 billion and $0.3 billion at December 31, 2025, and December 31, 2024, respectively.
At December 31, 2024, and 2023, the Company’s gross DTAs included $67.7 million and $64.2 million, respectively, applicable to SALT net operating loss and credit carryforwards that are available to offset future taxable income.
At December 31, 2025, and 2024, the Company’s gross DTAs included $66.1 million and $67.7 million, respectively, applicable to SALT net operating loss and credit carryforwards that are available to offset future taxable income.
A duration gap at or near zero would imply that the balance sheet is matched, and therefore, would exhibit no change in estimated economic value for changes in interest rates. At December 31, 2024, and 2023, the Company’s duration gap was 0.0 years and negative 1.1 years, respectively.
A duration gap at or near zero would imply that the balance sheet is matched, and therefore, would exhibit no change in estimated economic value for changes in interest rates. At December 31, 2025, and 2024, the Company’s duration gap was zero.
A description of the valuation methodologies used to estimate the fair values of the significant assets acquired and liabilities assumed in the Ametros acquisition can be found within Note 2: Acquisitions and Joint Ventures in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.
A description of the valuation methodologies used to estimate the fair values of the significant assets acquired and liabilities assumed in the Ametros acquisition can be found within Note 2: Business Developments in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data. 69 Table of Contents
The following table summarizes daily average balances of borrowings by type and the weighted-average rates paid thereon: Years ended December 31, 2024 2023 2022 (In thousands) Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Securities sold under agreements to repurchase $ 142,025 0.77 % $ 210,676 0.58 % $ 466,282 0.78 % Federal funds purchased 54,303 5.55 167,495 4.70 598,269 2.58 FHLB advances 2,296,048 5.46 4,275,394 5.21 1,965,577 2.98 Long-term debt 903,603 3.57 1,027,869 3.69 995,341 3.44 Total average borrowings $ 3,395,979 4.76 % $ 5,681,434 4.74 % $ 4,025,469 2.78 % Additional information regarding period-end borrowings balances and rates can be found within Note 11: Borrowings in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
The following table summarizes daily average balances of borrowings by type and the weighted-average rates paid thereon: Years ended December 31, 2025 2024 2023 (Dollars in thousands) Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Securities sold under agreements to repurchase $ 167,269 1.97 % $ 142,025 0.77 % $ 210,676 0.58 % Federal funds purchased — — 54,303 5.55 167,495 4.70 FHLB advances 2,508,404 4.43 2,296,048 5.46 4,275,394 5.21 Long-term debt 951,555 4.56 903,603 3.57 1,027,869 3.69 Total average borrowings $ 3,627,228 4.35 % $ 3,395,979 4.76 % $ 5,681,434 4.74 % Additional information regarding period-end borrowings balances and rates can be found within Note 10: Borrowings in the Notes to Consolidated Financial Statements contained in Part II - Item 8.
The Company ’ s consolidated financial condition and operating results for the year ended December 31, 2024, are not necessarily indicative of the consolidated financial condition or operating results that may be attained in future periods.
The Company ’ s consolidated financial condition, results of operations, and cash flows for the year ended December 31, 2025, are not necessarily indicative of results that may be attained in future periods.
In the loan portfolio, floors are a benefit to interest income in low interest rate environments. Floating-rate loans at floors pay a higher interest rate than a loan at a fully indexed rate without a floor, as with a floor, there is a limit on how low the interest rate can fall.
Floating-rate loans at floors pay a higher interest rate than a loan at a fully indexed rate without a floor, as with a floor, there is a limit on how low the interest rate can fall.
Based on the credit quality of the multi-family loans, among other factors, the Company estimated the amount of its reimbursement obligation to be $3.3 million at December 31, 2024. The Company was not required to make any guarantee payments to Freddie Mac during the fourth quarter of 2024.
Based on the credit quality of the multi-family loans, among other factors, the Company estimated the amount of its reimbursement obligation to be $3.3 million at December 31, 2025. The Company has not yet been required to make any guarantee payments to Freddie Mac.
On January 29, 2025, the Bank was approved to pay the Holding Company $100.0 million in dividends for the first quarter of 2025. The quarterly cash dividend to common stockholders remained at $0.40 per common share throughout 2024.
On January 28, 2026, the Bank was approved to pay the Company $300.0 million in dividends in the first quarter of 2026. The quarterly cash dividend to common stockholders remained at $0.40 per common share throughout 2025.
The Bank held FRB capital stock of $229.6 million and $227.9 million at December 31, 2024, and 2023, respectively. During the year ended December 31, 2024, the Bank received $9.9 million in dividends from the FRB.
The Bank held FRB of New York capital stock of $231.2 million and $229.6 million at December 31, 2025, and 2024, respectively. During the year ended December 31, 2025, the Bank received $9.9 million in dividends from the FRB of New York.
The Bank may also purchase term and overnight federal funds to meet its short-term liquidity needs. Due to a change in short-term funding mix, there were no federal funds purchased at December 31, 2024. Federal funds purchased totaled $100.0 million at December 31, 2023.
The $0.3 billion increase is primarily due to a change in short-term funding mix. The Bank may also purchase term and overnight federal funds to meet its short-term liquidity needs. There were no federal funds purchased at December 31, 2025, and 2024.
The Company’s models incorporate a single economic forecast scenario and macroeconomic assumptions over a reasonable and supportable forecast period. The development of the reasonable and supportable forecast assumes that each portfolio will revert to its long-term loss rate expectation. The reasonable and supportable forecast period is two years after which the reversion period is one year.
The development of the reasonable and supportable forecast assumes that each portfolio will revert to its long-term loss rate expectation. The reasonable and supportable forecast period is two years, after which the reversion period is one year.
The change in stockholders’ equity was attributed to the following: • Net income recognized of $768.7 million; • Other comprehensive loss, net of tax, of $5.8 million; • Dividends paid to common and preferred stockholders of $275.4 million and $16.7 million, respectively; • Stock-based compensation expense of $55.1 million; • Stock options exercised of $0.3 million; and • Repurchases of common stock of $65.8 million under the Company’s common stock repurchase program and $17.2 million related to employee share-based compensation plans. 45 Table of Contents Investment Securities Through its Corporate Treasury function, the Company maintains and invests in debt securities that are primarily used to provide a source of liquidity for operating needs, as a means to manage the Company’s interest-rate risk, and to generate interest income.
The change in stockholders’ equity was attributed to the following items: • Net income of $1.0 billion; • Other comprehensive income, net of tax, of $205.5 million; • Dividends paid to common and preferred stockholders of $267.6 million and $16.7 million, respectively; • Stock-based compensation expense of $56.8 million; • Stock options exercised of $0.1 million; and • Repurchases of common stock under the Company’s common stock repurchase program of $599.2 million, which includes the 1% excise tax on net stock repurchases, and $22.8 million related to employee stock-based compensation plan activity. 51 Table of Contents Investment Securities Through its Corporate Treasury function, the Company maintains and invests in debt securities that are primarily used to provide a source of liquidity for operating needs, as a means to manage the Company’s interest-rate risk, and to generate interest income.
Results of Operations The following table summarizes selected financial highlights and key performance indicators: At or for the years ended December 31, (In thousands, except per share data) 2024 2023 2022 Income and performance ratios: Net income $ 768,707 $ 867,840 $ 644,283 Net income available to common stockholders 752,057 851,190 628,364 Earnings per diluted common share 4.37 4.91 3.72 Return on average assets 1.00 % 1.18 % 0.99 % Return on average tangible common stockholders’ equity (non-GAAP) 14.35 16.95 13.34 Return on average common stockholders’ equity 8.71 10.59 8.44 Non-interest income as a percentage of total revenue 9.72 11.85 17.81 Asset quality: ACL on loans and leases $ 689,566 $ 635,737 $ 594,741 Non-performing assets (1) 461,751 218,600 206,136 ACL on loans and leases / total loans and leases 1.31 % 1.25 % 1.20 % Net charge-offs / average loans and leases 0.32 0.21 0.15 Non-performing loans and leases / total loans and leases (1) 0.88 0.41 0.41 Non-performing assets / total loans and leases plus OREO and repossessed assets (1) 0.88 0.43 0.41 ACL on loans and leases / non-performing loans and leases (1) 149.47 303.39 291.84 Other ratios: Tangible common equity (non-GAAP) 7.45 % 7.73 % 7.38 % Tier 1 Risk-Based Capital 12.06 11.62 11.23 Total Risk-Based Capital 14.24 13.72 13.25 CET1 Risk-Based Capital 11.54 11.11 10.71 Stockholders’ equity / total assets 11.56 11.60 11.30 Net interest margin 3.42 3.52 3.49 Efficiency ratio (non-GAAP) 45.43 42.15 43.42 Equity and share related: Common stockholders’ equity $ 8,849,235 $ 8,406,017 $ 7,772,207 Book value per common share 51.63 48.87 44.67 Tangible book value per common share (non-GAAP) 32.95 32.39 29.07 Common stock closing price 55.22 50.76 47.34 Dividends and equivalents declared per common share 1.60 1.60 1.60 Common shares issued and outstanding 171,391 172,022 174,008 Weighted-average common shares outstanding - basic 169,820 171,775 167,452 Weighted-average common shares - diluted 170,192 171,883 167,547 (1) Non-performing asset balances and related asset quality ratios exclude the impact of net unamortized (discounts)/premiums and net unamortized deferred (fees)/costs on loans and leases. 32 Table of Contents Non-GAAP Financial Measures The non-GAAP financial measures identified in the preceding table provide both management and investors with information useful in understanding the Company’s financial position, results of operations, the strength of its capital position, and overall business performance.
The Transaction is expected to close in the second half of 2026. 39 Table of Contents Results of Operations The following table summarizes selected financial highlights and key performance indicators: Years ended December 31, (In thousands, except per share and ratio data) 2025 2024 2023 Income and performance ratios: Net income $ 1,002,802 $ 768,707 $ 867,840 Net income applicable to common stockholders 974,861 744,076 843,268 Earnings per common share - diluted 5.90 4.37 4.91 Return on average assets 1.23 % 1.00 % 1.18 % Return on average tangible common stockholders’ equity (non-GAAP) 17.16 14.35 16.95 Return on average common stockholders’ equity 10.85 8.71 10.59 Non-interest income as a percentage of total revenue 13.85 9.72 11.85 Asset quality: ACL on loans and leases $ 719,411 $ 689,566 $ 635,737 Non-performing assets (1) 502,156 461,751 218,600 ACL on loans and leases / total loans and leases 1.27 % 1.31 % 1.25 % Net charge-offs / average loans and leases 0.33 0.32 0.21 Non-performing loans and leases / total loans and leases (1) 0.88 0.88 0.41 Non-performing assets / total loans and leases plus OREO and repossessed assets (1) 0.89 0.88 0.43 ACL on loans and leases / non-performing loans and leases (1) 143.69 149.47 303.39 Other ratios: Tangible common equity (non-GAAP) 7.42 % 7.45 % 7.73 % Tier 1 Risk-Based Capital 11.69 12.06 11.62 Total Risk-Based Capital 13.67 14.24 13.72 CET1 Risk-Based Capital 11.20 11.54 11.11 Stockholders’ equity / total assets 11.29 11.56 11.60 Net interest margin 3.42 3.42 3.52 Efficiency ratio (non-GAAP) 45.99 45.43 42.15 Equity and share related: Common stockholders’ equity $ 9,208,257 $ 8,849,235 $ 8,406,017 Book value per common share 57.12 51.63 48.87 Tangible book value per common share (non-GAAP) 37.20 32.95 32.39 Common stock closing price 62.94 55.22 50.76 Dividends and equivalents declared per common share 1.60 1.60 1.60 Common shares outstanding 161,216 171,391 172,022 Weighted-average common shares outstanding - basic 164,842 169,820 171,775 Weighted-average common shares - diluted 165,206 170,192 171,883 (1) Non-performing asset balances and related asset quality ratios exclude the impact of net unamortized (discounts)/premiums and net unamortized deferred (fees)/costs on loans and leases. 40 Table of Contents Non-GAAP Financial Measures The non-GAAP financial measures identified in the preceding table provide both management and investors with information useful in understanding the Company’s financial position, results of operations, the strength of its capital position, and overall business performance.
During the year ended December 31, 2024, the Bank paid $600.0 million in dividends to the Holding Company. At December 31, 2024, there was $747.3 million of retained earnings available for the payment of dividends by the Bank to the Holding Company.
During the year ended December 31, 2025, the Bank paid $900.0 million in dividends to the Company. At December 31, 2025, there was $634.6 million of retained earnings available for the payment of dividends by the Bank to the Company.
The following table summarizes daily average balances of deposits by type and the weighted-average rates paid thereon: Years ended December 31, 2024 2023 2022 (In thousands) Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Non-interest-bearing: Demand $ 10,387,807 — % $ 11,596,949 — % $ 12,912,894 — % Interest-bearing: Checking 9,555,367 1.89 8,845,284 1.48 8,842,792 0.34 Health savings accounts 8,650,485 0.15 8,249,332 0.15 7,826,576 0.08 Money market 19,354,659 4.05 15,769,533 3.61 10,797,645 0.66 Savings 6,879,935 1.54 7,259,640 0.78 8,625,691 0.16 Certificates of deposit 5,896,230 4.30 4,534,008 3.34 2,519,417 0.27 Brokered certificates of deposit 1,701,382 5.25 1,997,602 5.07 319,085 3.24 Total interest-bearing 52,038,058 2.74 46,655,399 2.19 38,931,206 0.36 Total average deposits $ 62,425,865 2.29 % $ 58,252,348 1.75 % $ 51,844,100 0.27 % Uninsured deposits represent the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit or similar state deposit insurance regime, and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regimes.
The following table summarizes daily average balances of deposits by type and the weighted-average rates paid thereon: Years ended December 31, 2025 2024 2023 (Dollars in thousands) Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Non-interest-bearing: Demand $ 10,227,051 — % $ 10,387,807 — % $ 11,596,949 — % Interest-bearing: Checking 10,158,941 1.75 9,555,367 1.89 8,845,284 1.48 Health savings accounts 9,177,995 0.16 8,650,485 0.15 8,249,332 0.15 Money market 22,161,593 3.47 19,354,659 4.05 15,769,533 3.61 Savings 7,217,900 1.65 6,879,935 1.54 7,259,640 0.78 Certificates of deposit 6,094,856 3.50 5,896,230 4.30 4,534,008 3.34 Brokered certificates of deposit 1,653,423 4.33 1,701,382 5.25 1,997,602 5.07 Total interest-bearing 56,464,708 2.42 52,038,058 2.74 46,655,399 2.19 Total average deposits $ 66,691,759 2.05 % $ 62,425,865 2.29 % $ 58,252,348 1.75 % Uninsured deposits represent the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit or similar state deposit insurance regimes, and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regimes.
Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that could have a direct material effect on the Company’s Consolidated Financial Statements.
The Company and the Bank are subject to various regulatory capital requirements administered by the federal bank regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that could have a direct material effect on the Company’s Consolidated Financial Statements.
The Bank held FHLB capital stock of $91.7 million and $99.0 million at December 31, 2024, and 2023, respectively. During the year ended December 31, 2024, the Bank received $8.7 million in dividends from the FHLB.
The Bank held FHLB of Boston capital stock of $125.2 million and $91.7 million at December 31, 2025, and 2024, respectively. During the year ended December 31, 2025, the Bank received $7.4 million in dividends from the FHLB of Boston.
At December 31, 2024, the Company’s remaining accrual for its estimated special assessment charge was $39.8 million, which is anticipated to be collected over a remainder of seven quarterly assessment periods. The FDIC retains the right to cease collection early, extend the special assessment collection period, and impose shortfall special assessments if actual losses exceed the amounts collected.
At December 31, 2025, the Company’s remaining accrual for its estimated special assessment charge was $5.9 million, which will be collected over the one remaining quarterly assessment period. The FDIC retains the right to cease collection early, extend the special assessment collection period, and impose shortfall special assessments if actual losses exceed the amounts collected.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 17: Derivative Financial Instruments in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data, which are incorporated herein by reference. 62 Table of Contents
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and within Note 16: Derivative Financial Instruments in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data, which are incorporated herein by reference. 70 Table of Contents

Other WBS 10-K year-over-year comparisons